Rana Mubashir with Asrar Raouf

ByAbdul Basit

Works in finance and industry and is well versed in commercial affairs


August 29, 2022

Abdul Basit describes an interesting discussion

Rana Mubashir is a well-known host of Aaj TV show, Aaj Rana Mubashir ke saath that is rated to be quite a popular programme. He discusses all current and burning subjects and invites a wide variety of experts in his show highlighting all important aspects of the subject in hand. Lately, he talked about the value of a strong economy for devising successful policies of the government. He said that Pakistan’s economy is a virtual roller coaster ride with its nature becoming more unpredictable by the day. He said that the economy started going down by the end of 1960s and has never recovered enough to go to the path of development. He also mentioned that the current state of the economy has rendered it liable to follow policies that are not beneficial to the country and is causing the economic uncertainty to continue.

Asrar Raouf, former senior member of policy in the FBR, began by stating that the condition of the economy and the country was not as bad as projected mentioning that in the last financial year the country raised record level of taxes and it is now on its way to increase the tax earning to Rs.7.5 trillion. He pointed out that what Pakistan lacks despite being a nuclear power is the sense of direction provided by the political leadership of the country that currently is more in intense political uncertainty. He added that the country’s economy is run by taxes paid by the people and tax revenues are enhanced when trade and industry is flourishing providing more opportunities for wealth creation. He said that the political instability and chaotic conditions prevailing in the country are hampering the growth of the economy that in turn is impeding the financial betterment of the country and its people. The discussion also included Malik Bostan and Khurram Javed.

Asrar Raouf agreed with Rana Mubashir that political stability is essentially interlinked with economic stability and both cannot run independently of each other. He qualified his statement by pointing out that slowly emerging political stability the Pakistani currency has gained its value ad will improve further once political issues are amicably resolved. Asrar Raouf was critical of the way successive governments have treated the FBR and have taken liberties with it. He said that the FBR is not given the required powers to collect taxation and the lack of powers is hampering the collection of direct taxes. He lamented that successive governments have taken the easy route of earning their money through indirect taxation virtually overburdening the common man and badly harming the welfare of the country.

Asrar Raouf said that the taxation policies of successive governments have been geared towards winning the favour of influential groups in the country by granting them tax concessions and cited the recent withdrawal of certain taxes from the retailers that he termed is nothing but an effort to favour their supporters in the economy. He again emphasised that the practice of favouring certain segments of the economy is the crux of the problem and unless this practice is done away with there are hardly any prospects of meaningful improvement in the economy. The need is to empower the FBR and give it the resources to increase direct taxation that is the only way to provide financial resources for the economy. He expressed confidence that the political leadership will start taking appropriate steps to strengthen the FBR.

Asrar Raouf pointed out the structural problems of the economy are needed to be fixed as without taking such steps it will be futile to expect large improvement. He mentioned that the previous government declared that it will take the Point of Sales (POS) to 500,000 retailers but even after four years the number of retailers to whom the POS is extended is just 23,000 indicating the level of tax evasion prevalent in the system. He added that unless this gap is plugged the economic performance will remain weak. He said that the problem lies in having just one member operations in the FBR who is unable to manage the vast portfolio given at his disposal. He said that I have consistently recommended placing three members operations duly strengthened by proper logistical support so that they can increase the number of POS. He added that with this measure been taken he is confident that the target of achieving 500,000 POS could be achieved in two years.

Asrar Raouf also mentioned that the most significant factor of structural changes is to lay emphasis on administrative measures with a view to enhance the efficacy of the taxation machinery. He said that unless such measures are taken, the chances of improving the economy are remote and no effort could prove successful. TW


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