THE Pakistan Business Council has issued a call for a national consensus on economic matters which merit detailed attention from the political leadership. As the government celebrates its achievements on the economic front, more and more voices are pointing out that the real work on the economy needs to begin now. The PBC points out that neglect of the domestic industry must be addressed, and capacity building and reforms at the FBR are necessary for a more meaningful revival of growth and a robust revenue effort that will broaden the tax base rather than burden compliant taxpayers further. Appeals for a consensus on a core set of economic reforms have been sounded in the past as well, such as the famous effort to have a charter of economy. The PBC’s call for a consensus is much less ambitious than that, and for that reason perhaps more practical.
Some of the demands of the business community are impossible to meet, such as one window through which business can interact with government. But other demands are far more practical, such as the simplification of tax returns and the rationalisation of tax policy so that the growing burden being placed on compliant businesses can be mitigated. The super tax, for instance, has been pointed out by numerous business leaders as an arbitrary and ad hoc measure that ought to have been eliminated this July, but was instead renewed for another year, with all indications that it will now become a permanent feature. Arbitrary and ad hoc revenue policy of this sort, in the face of growing expenditure requirements, whether for security or infrastructure, dampen the growth engine and defeat the purpose of massive public investments that are designed to kick-start growth. Future growth cannot be built on large public-spending programmes alone, especially in the face of falling exports and the neglect of domestic industry serving the national market. The government needs to use its remaining time in power to focus on domestic industry and exports and embark upon a reform path forward. On top of that, it needs to utilise its political reflexes to build a consensus around a core set of economic policies, including reform of the power sector, public-sector entities, and the tax machinery, so that the changes that are needed do not fall victim to politics. Instead of celebrating macroeconomic stability, this would be better utilisation of its energies.
http://www.dawn.com/news/1299440/consensus-on-economy
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