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Political confrontations put negative impact on national economy: Asad Umar

Political confrontations put negative impact on national economy: Asad Umar

ISLAMABAD: Federal Minister for Finance Asad Umar said that political confrontations put negative impact on the national economy and decisions should be made with consensus.

He expressed these views during a pre-budget consultation and book launch titled “Growth & Inequality in Pakistan”, jointly organized by Sustainable Development Policy Institute (SDPI) and Friedrich-Ebert-Stiftung (FES) Office Pakistan, here on Tuesday.

He said that however, proceedings of tracking crime and upholding rule of law are not political confrontations, and this must be distinguished. In the long run if there is a rule of law, justice in the society and supremacy of the constitution, we can help strengthen our economy, he added.

He said that our economic decision should be informed by sound economic theory and indigenous empirical research, as there is no substitute for grass root level research. He informed that it is sad reality that Pakistan is an elite captured society and we all need to strive for a society and political system where elite influence can be mitigated. He emphasized the need for introducing and implementing wealth tax which has fundamental place in the advanced economies.

Hammad Azhar said that there is a lot of debate on the adverse impacts of stabilization which should be seen and debated as necessary steps to rescue the economy.

He further told that there was little improvement in revenue collection and Tax to GDP ratio in last years, which was largely through withholding tax (WHT), indirect and advance taxes. He added that to correct this morass we took decision of separating tax policy with tax administration and tax policy is no longer part of FBR which is now under Ministry of Finance.

Hammad Azhar emphasized that the need of reforming tax laws and deploying technology to by-pass FBR registration, complete elimination of interaction between a tax collector and taxpayers and tracking every single notice of recovery is much-need.

Talking in the occasion Abdul Razak Dawood, Advisor to the Prime Minister on Commerce, Textile, Industry and Investment said in the past we negotiated very bad Free Trade Agreements (FTAs) especially with China and we have the opportunity to renegotiate with better terms in the second phase of CPEC. He informed that Pakistan has re-negotiated successfully FTA with Indonesia and got duty free unilateral access on 20 trade items in Indonesian markets. On industrial policy he said the government will not provide any subsidies to the industries, but to help arrange funding for upgrading the industries on technology front.