Pakistan Finance Minister urges elites to pay taxes

| Last updated less than one minute ago

Submit :

News Photos Just In Debate Topic Latest News Articles Local News Blog Posts Pictures Reviews Recipes

Sam

18 June, 2011

Pakistan's Finance Minister Abdul Hafeez Shaikh has called for an increased effort by lawmakers and the elite class to bring the country out of its current economic crisis.

TAKING INTO account the deteriorating economic situation in Pakistan, Finance Minister Abdul Hafeez Shaikh has called on all the lawmakers and the elite class to pay taxes. The minister, during a budget session in Parliament yesterday, stressed that it was the duty of lawmakers to pay taxes and encourage others to do the same. He further said that paying taxes was the key to making Pakistan self-reliant. Presently, of the country’s 187 million people, only 1.5 million pay taxes. According to the minister, it is a national duty of all Pakistanis, including top businessmen, media people and others earning huge income to pay income tax. He also urged the ministers not to waste state funds.

After several years of progress, Pakistan’s economy is now undergoing a bad phase because of high inflation rate and weak currency. While three years back, majority of Pakistanis were optimistic about the country’s economic growth, the same majority now says that they don’t have much hope. Pakistan recorded a significant economic growth rate (7.0 per cent per year) from 2000 to 2007. But things changed in the following years because of high inflation rate, global financial crisis and political transition after the General Elections on February 18, 2008. The government had no other option, but to borrow money from the International Monetary Fund (IMF).

The economy is still in tatters and surviving on a bailout package from IMF and the World Bank. The country has already received $7 billion from the international lenders, but an agreement remains suspended regarding the sixth installment. The two parties began talks over the installment in May 2010.

However, no agreement was reach because of the government's inability to meet the performance benchmarks set under the bailout deal. The deal still remains suspended. Overall, the government has borrowed $50 billion from the IMF, the World Bank and the Asian Development Bank, so far. With the country’s unemployment rate increasing at around 50 per cent, accelerating population rate, below 5 per cent investment in public sector and only 10 per cent tax to GDP ratio, the only hope for revival of economy is strict reforms.