- ‘Economies are built by the people; without investing in human resource, prosperity can never be achieved’
KARACHI: The Association of Chartered Certified Accountants (ACCA) Pakistan organised a high profile post-budget conversation titled ‘The Budget 2019–20: Opportunities and Challenges for Economic Reforms’ in Islamabad to provide a platform to the business community and thought leaders to propose key economic reforms and share their feedback and recommendations on the proposed Finance Bill 2019-20.
The conversation was opened by Sajjeed Aslam, head of ACCA Pakistan. In his speech, he summarised the budget recommendations submitted by the global body for professional accountants and shared actionable recommendations toward making the current taxation regime more transparent, efficient and progressive to meet the country’s economic and social needs.
He emphasised that the focus should be on human development and progress in the country and not merely on improving a few macroeconomic indicators. He stressed the importance of professionalism and ethics for talent in the public sector.
“Budget is a subset of the economy. You can never have a good budget unless you correct the flaws in your economic model and bring radical reforms. Economies are built by the people; without investing in the human resource, prosperity can never be achieved,” Sajjeed Aslam remarked.
The event featured an insightful panel discussion with contributions from prominent policymakers, senior bureaucrats, tax consultants, influential thought leaders and senior ACCA members. Notable speakers included Sustainable Development Policy Institute (SDPI) Executive Director Dr Abid Qaiyum Suleri, Institute of Cost & Management Accountants of Pakistan (ICMA) Pakistan President Ziaul Mustafa, senior energy professional Salman Amin, CPEC Project Director Hassan Daud Butt, Ministry of Planning Chief Macroeconomist Zafarul Hassan, and ACCA Pakistan Member Network Panel Chairman Omer Zaheer Meer.
“To solve our circular debt crisis, we need to work on improving the performance of our public sector enterprises and should encourage those who’re buying dollars to invest in conventional savings and investment products. Also, rationalisation of slabs in the gas tariffs is necessary,” said Dr Abid Qaiyum Suleri.
The conversation leaders commented that to truly solve Pakistan’s current economic woes and to meet its social challenges, it’s imperative to work on increasing the size of the economy and to aim at a higher average annual GDP growth rate compared to what is predicted in the budget document.
The panel also pointed out that the finance ministry and the Planning Commission of Pakistan are working on two different GDP growth forecasts and both are approved by the Prime Minister’s Office.
It opined that the twelfth five-year plan (2018-23) should be publically debated and should serve as the base for a charter of economy with an across-the-board political consensus.
The speakers agreed that the underlying philosophy of the proposed budget is a right step toward a documented economy and broadening of the tax base. There was a general consensus that tax collection of over Rs5.5 trillion is a realistic reflection of the potential even within the current economic scenario. However, in its current form, it may not appear to pass the test of fair and equitable tenants of taxation on account of the minimum tax regime.
The twin fiscal deficit would continue to challenge the country and may need innovative and bold steps by the business community and the government to truly drive an inclusive and accelerated growth. The current growth targets and development budget are not consistent with the country’s installed energy capacity, infrastructure projects committed and objectives of industrialisation phase under China–Pakistan Economic Corridor (CPEC).
Participants of the conversation urged the government and the Federal Board of Revenue (FBR) to take concrete steps toward the simplification of the tax filing system by moving to automation. Advocacy programmes at the grassroots level to create support and awareness for the government’s initiatives should also be explored.
It was also expressed that the current monetary policy was a hurdle in the way of industrialisation and growth. It was agreed that the trust deficit between the business community and FBR needs to be bridged to improve tax collection.
It was concluded that Pakistan has a deficit of trained professional accountants and legal practitioners to support over 95,000 businesses and potential 5 million tax filers to help them with developing an ethical mindset and full compliance with the tax regulations to support the country’s economic progress. The dearth of skilled talent is one of the biggest impediments in the way to achieving Pakistan’s growth potential.