New Budget: How to Provide Solution to Problems

Overview

Budget for 2013-14 is going to be announced tomorrow. Economic survey report has already been submitted and it is being anticipated that like the previous ones this budget will also be populous in redundancy rather than delivery.

The issue arises now to include rationality in the economic approach related to budgeting. There are two ways to bring improvement one is when expense is controlled and the other is when there is an increase in revenue generation.

Why are we not able to apply the principle of spending less, making more? It has almost been 65 years since Pakistan was made?

A few things to be clarified first, our GDP to income tax ratio is less than 10% and almost 50% of our economy is undocumented. Now in the documented economy major sectors for instance agriculture, retail, transport and services etc still remain non-taxable. To retain our sovereignty we need to cut down on expenditures. This incapacitates the system to spend less and earn more.

Why do governments not challenge taxation division?

Pakistan’s 70 % of rural sector is a part of parliament and government. To resolve the matter we need to improve tax administration and cut down corruption. Procurement needs to be monitored so that redundancy can be downsized.

Our problem is that 60% of tax is indirect. For this particular reason taxation affects common man and does not target rich people.

Many politicians have resources that are unexplained, they apparently don’t do business or work. Why doesn’t our law require an explanation from them?

Unfortunately whichever forum the government develops for accountability gets politically used. This hinders the proper function of accountability.

Major chunk of revenue is lost to corruption in public procurement and flawed taxation administration.

How much of a policy maker’s credibility has been damaged by lack in transparency of assets possessed?

The only form of accountability that works well can survive if the system is fair, gives justice across the board and where tax administrator’s discretionary powers are limited to avoid corruption. In our time we decreased tax administration’s discretionary powers over period of time.

How do we solve the problem of power shortage?

In this country there is a massive failure of prosecution. High profile cases were revived and all of them faced compromised prosecution. It is needed that services reform should be initiated and prosecuting agents should be given autonomy to make decisions.

Source: Pakistan Tonight – ARY News – 31 May 2012

 

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