Pakistan’s tax regime riddled with inefficiencies, agree panellists at LSE’s ‘Future of Pakistan’ moot
Dr Miftah Ismail, Hammad Azhar and Yousuf Nazar on agricultural tax, domestic productivity and State Bank of Pakistan’s independence
December 08, 2020
LONDON: Pakistan’s tax regime is riddled with inefficiencies like withholding taxes and the share of direct taxation needs to increase for the growth of the country's economy, agreed panelists at a London School of Economics conference Monday.
The ‘Future of Pakistan’ moot was hosted virtually by the LSE Students’ Union Pakistan Development Society and attended by sitting ministers, lawyers, journalists, opposition members and other key experts.
The panel on economy touched upon issues of taxation, domestic productivity and the lack of consensus on some key macroeconomic issues. Minister for Industries and Production Hammad Azhar, former finance minister Dr Miftah Ismail and economist and commentator Yousuf Nazar were among the panellists.
“I am not particularly gung ho about agricultural tax as farming is not competitive compared to the rest of the world and instead there should be a rigorous property tax in Pakistan,” Dr Ismail said.
Read more: No more extension in date to file income tax returns, FBR says
Agreeing with Dr Ismail, Azhar added that agricultural income can still be taxed based on different income thresholds.
Nazar argued that the primary reasons behind Pakistan’s stagnant domestic productivity is a lack of spending on human development and the rent-seeking nature of the economy.
Azhar pointed out that there is a “fragile consensus” emerging within the political parties on the State Bank’s independence and Dr Ismail agreed, which presents a positive outlook of the monetary policy of Pakistan going ahead.
LSE SU Pakistan Development Society President Mustafa Yar Hiraj said the mission of the conference is to connect the minds of tomorrow with the decision and policymakers of today for a bright future for Pakistan.
“As Pakistani students studying abroad, I think that it is our duty to use our education, exposure and experience to come back and serve our country to the best of our abilities. We should be confident of our own potential and optimistic about our future, and so should the rest of the world,” he said in his closing remarks.
On human rights
Minister for Human Rights Shireen Mazari, Barrister Aitzaz Ahsan and legal expert Reema Omer were part of the first panel.
Read more: Pakistan Tax Bar Association appeals FBR to extend deadline for filing income tax returns
Omer opened with the argument that some human rights are not even an aspiration under the status quo. “From the top, the messaging has been very mixed,” she noted.
Dr Mazari responded that the new anti-rape ordinance was a cause for optimism.
Beyond the law, Barrister Ahsan stressed the importance of not seeing the law in isolation but in the context of societal issues. “We are stuck in a medieval age,” he said.
The panelists agreed that there was a need to create awareness about rights at all levels of society, especially state officials.
“We need to create awareness and I am optimistic. No subject is taboo now… our Ministry has framed a bill on enforced disappearances. No government has done this before,” said Dr Mazari.
On foreign policy
The future of Pakistan’s relationship with the USA’s incoming administration in the context of the Afghan peace process and the issue of Kashmir was discussed by the panel on foreign policy.
It included AJK President Sardar Masood Khan, former foreign minister Hina Rabbani Khar and senior journalist Najam Sethi.
“We must give importance to the intra-Afghan dialogue, which is imperative for stability that Pakistan wants in Afghanistan,” Khar said.
Sethi disagreed and thought that it would not reap any fruitful results. He said “the unrest will continue and there will not be a stable arrangement - the Taliban will eventually rise to power”.
On the Kashmir issue, President Khan said we need to independently engage with the US on Kashmir, particularly the issues of human rights violations.
