Economic managers score success

SEVERAL developments that took place on Wednesday speak of the success that the new team of economic managers of the Government has achieved on different fronts. Data released by FBR showed that the amnesty scheme launched by PTI Government produced encouraging results as about 140,000 people benefitted from the scheme and the national kitty received Rs 65 billion as a result of successful implementation of the scheme. As the deadline for declaration of assets expired, the FBR moved firmly against holders of Benami assets serving them notices and freezing the assets, sending a clear message that there would be no escape for tax evaders. In another development, the International Monetary Fund (IMF) okayed $6 billion bailout package for Pakistan and the country would get $ 1 billion this year that would go a long way in mitigating financial woes of the Government.
Credit for all these positive developments must go to Advisor on Finance Dr. Abdul Hafeez Shaikh and Chairman FBR Shabbar Zaidi who are pursuing their strategies with required resolve and commitment and as a consequence one gets a clear impression that for the first time seriousness is being shown to address real issues. Doubts were cast on the success of the assets declaration scheme as it came on the heels of expiry of a similar scheme completed by the previous government of PML-N. It was argued that the new scheme has limited scope of success as those who wanted to avail amnesty, whitened their assets during earlier scheme. However, repeated appeals and warnings by Prime Minister Imran Khan, unbending position adopted by the Advisor on the basis of principles and ground work done by the FBR motivated people to participate in the scheme and avoid action thereafter.
The amount of Rs 65 billion might not seem to be impressive keeping in view the widespread practice of tax evasion but the fact that the scheme was largely availed by those who were not into the tax net. Addition of over one hundred thousand non-filers into the tax system would go a long way in broad-basing the tax collection. Reforms introduced in the FBR are also promising and hopefully these would lead to identification of more and more tax evaders and bringing them to the tax net. Action initiated against holders of Benami assets is also welcome but the impression that only the opposition leaders are involved in the practice needs to be undone; otherwise a genuine campaign would be politicised. There should be across the board action against all tax evaders irrespective of which segments of the society they belong to. Reports indicate that FBR missed its tax collection target for the last financial year, raising questions about realization of the ambitious target for the current financial year.
However, keeping in view the prevailing recession, lack of economic activities, dwindling investment for a variety of reasons and shattered confidence of the business community, the FBR showed good performance and now that its working is being streamlined it is hoped that it would make amends during the ongoing year. The clearance of the loan programme by the IMF Board has also sent a message to the outside world that Pakistan was committed to taking difficult but necessary measures to address economic and financial challenges. The IMF believes its programme will help Pakistan reduce economic vulnerabilities and generate sustainable and balanced growth focusing on a decisive fiscal consolidation to reduce public debt and built resilience while expanding social spending; a flexible, market-determined exchange rate to restore competitiveness and rebuilt official reserves; to eliminate quasi-fiscal losses in the energy sector and to strengthen institutions and enhance transparency. These are noble objectives but neither any of these things happened in the past nor there is any indication that it is going to happen now. So far, the conditions that the Government has agreed upon with the IMF have led to volatility in economic activities, created uncertainties, undermined confidence of businessmen and gave the gift of price-hike to the masses. IMF has decided to disburse one billion dollars on fulfilment of initial conditions and linked the remaining $5 billion to satisfactory implementation of the rest of provisions of the deal. This effectively means people will have to be ready for more ‘sacrifice’ during the next three years when the programme will remain in force.

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