Financial issues, serious economic challenges await new govt: APBF

ISLAMABAD   -   The All Pakistan Business Forum has warned that the financial constraints and the economic challenges are awaiting the incoming government amidst highest re­cord inflation and unemployment in the country. The APBF President Syed Maaz Mahmood said that the new government would have to face mammoth economic challenges. The country is facing challeng­es like higher inflation and unemployment rates, ongoing IMF program and possible engagement for fresh program to improve balance of payments situation, debt re­structuring, framing new resource shar­ing formula between centre and provinces, National Finance Commission (NFC) and privatization of loss-making state-owned entities. However, it would be a challenging task for the coalition government.

He said that results of the current gen­eral elections are indicating for establish­ing a coalition government at the fed­eral level, which would have to deal with plethora of economic issues including higher inflation and unemployment rates, dealing with International Monetary Fund (IMF), debt restructuring and others.

Syed Maaz Mahmood said that the country is currently witnessing higher in­flation rate, which would be a main chal­lenge for the new coalition government. Inflation has remained in the range of 28 to 29 percent in the last few months main­ly due to increase in energy prices.

According to the World Bank’s Ease of Doing Business Index, Pakistan is ranked 136th in the world overall and 172nd, in terms of tax compliance. According to these rankings, the major obstacles to eco­nomic investment at the moment are the government’s complex systems, lack of transparency, and complex tax laws and regulations. Further, to boost foreign ex­change revenues, the federal government must prioritize export promotion strate­gies. This can be accomplished by increas­ing export competitiveness, diversifying export products, supporting exporters, and locating new markets through trade agreements and diplomatic efforts.

The World Bank’s Paying Taxes report states that the sub-indicators of the over­all measure of paying taxes, such as the number of payments and time to comply, in particular, evaluate the advancement of online tax filing and payment. The extent of these indicators decreases as IT-enabled tax system procedures increase. Accord­ing to this data, Pakistan is ranked lower among the Asian Pacific nations for over­all taxpayers. Several actions can be taken to address Pakistan’s fiscal and economic issues and provide pave the road forward such as strengthening tax administration and broadening the tax base by bringing more individuals and businesses into the tax net. It is crucial to promote economic documentation to increase revenue collec­tion, diminish the informal economy, fight tax evasion, and boost tax collection meth­ods through automation and digitalization. To lessen reliance on external borrowing and manage the present debt burden suc­cessfully, a strong debt management strat­egy is also urgently needed.

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