THE future of any economy depends upon the short-run and long-term economic policies and infrastructure. These policies include monetary policy, fiscal policy, budgetary policy and transparency.
According to the fiscal policy statement of 2015-16, the trend in fiscal deficit as percentage of GDP shows Pakistan is back on the level of 1999-2000. The Economic Survep of Pakistan and debt policy coordination office staff calculations showthat government is reducing development expenditures since 2013.
The development of economy without development expenditure is not possible anywhere in the world.
According to fiscal operations 2014-15 of finance division, collection of indirect taxes are Rs1,088 billion as compared to Rs1,026 billion collected from direct taxes. This depicts that a poor citizen is paying as much tax as the rich are paying.
The problem here is not that the people are not ready to pay direct taxes, but it is about the confidence the nation does not have in the fair use of the funds from their pocket.
If FBR opens the transparency to public, I think most of the individuals will start paying taxes. The government should divert its attention from borrow-and-spend policy to earn-and-invest policy.
