Infostani International- In the year 2024, Pakistan requires a robust, democratically elected government focused on implementing economic reforms, addressing the primary concern of voters for financial improvement. The newly elected ministers must not merely identify issues but also present solutions. The lessons from the current caretaker government should guide the next administration in continuing effective policies to ensure project completion. International Monetary Fund terms are not the optimal solutions, as they diminish the borrowing country’s autonomy.
New Government Agenda: Economic Restructuring and Tax Reforms for Prosperous Pakistan
Upon the formation of the new government, it should take steps such as restructuring loss-making enterprises, allocating electricity transmission companies’ losses to provinces instead of the federal government, and sustaining government development projects. Prioritizing sectors like health, education, and agriculture, particularly through the continuation of the Benazir Income Support Program, is crucial. Timely action is essential to prevent political delays and incompetence. Provincial, district, and local governments need encouragement to efficiently collect revenue from the services, real estate, agriculture, and retail sectors by expanding the tax net.
Formulating an agricultural policy to foster export-oriented growth and attract foreign direct investment is imperative. Efforts to increase the tax rate beyond 15% of the GDP should involve bringing nobles and elites enjoying tax concessions under a mandatory tax regime. Adjusting tax rates on mutual fund investments and stock market capital gains based on profit levels is necessary for fairness. Currently, individuals earning a few lakhs of rupees and those earning crores pay taxes at the same rate.
Optimizing Taxation and Investment: A Strategy for Economic Growth
Most tax revenue is allocated to debt repayment at a 22% interest rate. Reducing this rate could channel 50% of the savings into various sectors, including IT, and subsidize agriculture, minerals, textiles, pharmaceuticals, and export sectors. To curb imports, the tax on luxury goods should rise. While the tax on raw materials needed for exports should decrease. Avoiding excessive interference with interest rates is advised. Instead of scholarships, focus on providing training to selected individuals to enhance their digital capacity. Offer financial incentives and support grants for establishing new IT universities.