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  • Mar 14th, 2018
  • Comments Off on Vision 2025: FBR upbeat about achieving increase in tax-to-GDP ratio
The Federal Board of Revenue (FBR) is confident that increase in tax-to-GDP ratio as envisioned in 'Pakistan Vision 2025' will be achieved for which administrative and enforcement measures have been taken for broadening the tax base.

Sources told Business Recorder here on Tuesday that the issue of tax-to-GDP ratio came under discussion during a meeting held at the Planning Division to review progress and implementation status of goals of Pakistan Vision 2025 related to external sector. The meeting was held with secretary Ministry of Planning, Development and Reform in the chair.

The representative of the Federal Board of Revenue (FBR) assured the meeting that increase in tax-to-GDP ratio as envisioned in Pakistan Vision 2025 will be achieved.

The secretary planning emphasized that goals of Vision 2025 can be only achieved through joint actions by all ministries' stakeholders. The meeting reviewed the progress made so far and suggested way forward. The Joint Chief Economist (Marco) project director Vision 2025 briefed the meeting about Pakistan Vision 2025 goals related to external sector ie foreign direct investment, exports, ease of doing business, ranking and global competitiveness index ranking, Diaspora investment, remittances, per capita income and tax to GDP ratio.

The secretary Board of Investment (BOI) viewed that a donor agency does not capture the several reforms and steps taken by the Pakistan while preparing ranking on ease of doing business. The BOI secretary also mentioned that the misreporting by survey contributors has already been taken up with the World Bank and hopefully Pakistan ranking will improve a lot once the actual situation is reflected. The BOI director gave detailed account of several measures being rigorously taken by provincial and federal departments to improve business processes like tax automation, one stop shop, automation of land record system, etc.

The deputy chief Commerce Division informed the meeting that Commerce Division has initiated various measures to boost exports of value added products with emphasis on diversification, exploration of new markets and facilitation to exporters. He was of the view that providing electricity to industry at rationalized tariff and disbursement of credit at concessional rates in line with competitors will help enhance competitiveness of Pakistani products.

Deliberating on the Goal 8 of the Vision 2025 ie to become one of the top 25 economies of the world, the SBP representative said that Pakistan is lagging far behind in terms of several indicators when compared to top 25 countries. He suggested that in order to ensure sustained growth in GDP, "we need to focus on improving education and health indicators through earmarking more resources for these two sectors."

The SBP director stated that they are playing their role to ensure macroeconomic stability. The policy rate has been managed in a prudent way to avoid any abrupt adjustment and contain negative sentiment. The SBP also informed that financial inclusion is one of the main goals of the SBP Vision 2020.

Remittance initiative (PRI) is bearing fruit and remittance inflows through banking channels have shown improvement. Exchange companies abroad are now authorized to act as agents on part of the SBP to bring more remittances through official and recorded channels. The SBP representative highlighted that there is a need to expand and diversify worker's market overseas to overcome the challenges arising out of Saudi Arabia and Middle East workers policies.

The representative of SBP informed the meeting that foreign direct investment (FDI) under the CPEC portfolio is now being reflected in the FDI figures. Quarterly surveys are being conducted to properly capture FDI inflows. They emphasized that their FDI regime is more liberal than that of India and Bangladesh. He further suggested that their foreign missions should vigorously highlight the positive developments taking place in the country to improve the image of Pakistan.

The chair appreciated the SBP efforts and asked them to share their ideas and proposals formally at the relevant forums. The senior joint secretary Textile Division shared with the meeting that business procedures are being simplified to boost and facilitate exports. In coming days, a meeting of (15) local brands is scheduled and they will be encouraged to boost overseas sales of their respective brands.

The Ministry of Commerce & Textile (C&T) will further strengthen measures to enhance exports competitiveness and will focus on trade diversification, integration, facilitation and openness. Above all Ministry of C&T will promote brands of Pakistan internationally as envisioned in the Vision 2025. The Board of Investment and State Bank of Pakistan will formulate strategies to promote foreign direct investment in the country through creating enabling environment.

The Ministry of Commerce & Textile, BOI, the FBR and the SBP will further streamline and strengthen actions to improve ease of doing business ranking and global competitiveness ranking. The Finance Division and the SBP will strengthen measures to enhance remittances through banking channels. The progress regarding achievements of goals of Vision 2025 will be reviewed on monthly basis, the sources added.

Copyright Business Recorder, 2018


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