Six steps

This refers to the article, ‘Six questions’ (June 30, 2019) by Dr Farrukh Saleem. The writer suggests that the government must focus on growth to expand tax collection. But he does not specify what type of growth. During the PML-N rule, growth reached almost six percent but it was an illusory one. Most of the money got invested in non-productive and less productive avenues viz real estate, trading, airports, metro bus, metro train, motorways, fossil-based power plants etc. This caused huge accumulation of debt without building up the repayment capacity.PM Imran Khan was of the view that once a clean government is put in place, everything would fall in line. But he did not realize that management of the economy requires skill and foresight. He did all the wrong things, leading to the present economic mess. Hefty devaluation was advised to rejuvenate exports but it remains flat. Interest rate has been jacked up which discourages investment. Cost-push inflation is destroying industry competitiveness. The PTI government can still recover the economy provided it abandons the IMF programme and takes six critical steps – a drastic cut in the import bill by disallowing import of luxury and unnecessary items; enhance the punishment for smuggling to death penalty; demonetize/withdraw the Rs5000 note to uncover black money and document the economy to complement the amnesty scheme; shut down all exchange firms/money changers’ outlets to stop money laundering; lower the corporate tax rate on manufacturing business and increase the tax rate on real estate and trading business so that investment is redirected towards the former; and tax holiday for three years for all new industrial units that are set up.Huma ArifKarachi

from The News International - Newspost https://ift.tt/2Ns09OT