Pakistan Economy Watch (PEW)

FBR’s move to milk honest taxpayers blasted: PEW

Action should be taken against tax evaders
FBR’s decision to hit the government’s reputation

The Pakistan Economy Watch (PEW) on Saturday condemned the move by Federal Board of Revenue (FBR) to mint billions of rupees from late filers and salaried class.

The FBR is in habit of milking honest taxpayers to hide its inefficiency and corruption which should be noticed by the government, it said.

The Apex tax agency has issued notices to over a million late filers asking them to pay two percent of their total turnover or pay twenty-five percent over and above the tax paid for the last year which is deception and extortion, said Dr. Murtaza Mughal, President of PEW.

The FBR has not taken any meaningful action against tax evaders and non-filers but it continues to punish honest taxpayers to meet targets which is not tolerable, he added.

Dr. Murtaza Mughal said that salaried class has been given the option to pay Rs2000 before the deadline or face legal action which is a solid case of harassment as the salaried class has already paid over Rs133 billion in taxes during the last year.

He said that a part of the business community is in a position to agree to the unethical demands of FBR so that the institution can show enhanced revenue generation but the salaried class which is already reeling under inflation cannot bear this burden.

Masses are frequently told to become filer but when they trust the authorities and become a filer then they are cheated which is damaging the reputation of the government, he observed.

FBR is pressurizing taxpayers for additional revenue through different tactics which is like a witch-hunt that will widen the gulf between the taxpayers and the FBR, he warned.

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Govt asked to stop betting on dead horses: PEW

The decision to revive state-run entities opposed

The Pakistan Economy Watch (PEW) on Sunday asked the government to sell the loss-making state enterprises without any delay.

Turning around the overstaffed state-run-enterprising facing poor leadership is something that has been experienced many times in the past without any success, it said.

The time has come for the government to stop betting money on the dead horses eating into national finances, said Dr. Murtaza Mughal, President PEW.

These entities are draining resources since decades and the cost of maintaining these monsters is four percent of GDP which is unbearable, he added.

Dr. Murtaza Mughal said that SBP, OGDC, NBP, PPL, PSO, and PARCO are among paying dividends while almost two hundred enterprises including Pakistan Steel Mills, PIA, Railways, and the Discos are among loss-making entities.

The PIA having 15,000 employees continue to drain resources while it has fallen from national pride to national embarrassment due to inept leadership, an excessive workforce, and politicization.

Last year alone, the railways ate up Rs38.5 billion rupees of government money to gross mismanagement and incompetence and this year an additional Rs37 billion has been budgeted for the purpose.

In almost all the state-run-enterprises the individual interests supersede those of the organizations, corruption has become the order of the day while the only way out is genuine financial restructuring which is not possible given the government’s current state of finances.

The occasional packages for these leeches have never worked and will never work in future while creating holding company and some kind of a sovereign wealth fund will not motivate workers and managers to go beyond self-interest.

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PEW supports FBR reforms

Separation of tax collection from policy formulation hailed
Move to infuse confidence in the business community
The Pakistan Economy Watch (PEW) Chairman Brig. Muhammad Aslam Khan (Retd) on Sunday supported reforms in the FBR terming it a positive step which will infuse confidence in the business community.
The decision to limit the role of FBR to tax collection and entrusting policymaking to Tax Policy Board is a major step in the right direction which will lessen the complaints of the taxpayers, he said.
In a statement issued here today, he said that limiting the role of tax administration was demanded by the business community which will improve the situation and reduces dependence on foreign loans.
The decision is a larger shift in the governance of the tax administration which is opposite to what the former government did that augmented the sufferings of masses, he added.
Brig. Muhammad Aslam Khan said that FBR is pushing the policy of regressive taxation as it continues to collect 82 percent taxes from masses while the ratio of direct taxation is only 18 percent which is fanning poverty.
He hoped that the Tax Policy Board will improve the taxation system to ensure equal distribution of wealth which will provide relief to masses and help expand the tax net.
At the occasion, Dr. Murtaza Mughal, President PEW said that government will form a committee which will formulate a larger tax reform framework with the help of independent tax.
He said that Prime Minister Imran Khan in his first speech promised to start the reform process with the FBR. He should also try to reduce corruption in the department and ensure that tax should be used to provide services to the taxpayer which will automatically improve the relationship between the state and the taxpayers.
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New FPCCI president to be elected from Balochistan: PEW

The Pakistan Economy Watch (PEW) on Tuesday said the new president of the FPCCI will be elected from the resource-rich but underdeveloped province of Balochistan.
The FPCCI elections are scheduled on December 28 while the underdeveloped province of Balochistan gets a chance after every seven years, it said.
Dr. Murtaza Mughal, President of the PEW said in a statement that the United Business Group (UBG) has been ignoring the problems faced by the business community in Balochistan which will make elections difficult for it.
The UBG could not get a strong candidate and it has nominated Daro Khan Achakzai from Chaman Chamber for the slot of president FPCCI while the rival Businessmen Panel has yet to announced their candidate, he added.
Dr. Murtaza Mughal said that Naveed Jan Baloch from Gwadar Chamber and Ghulam Farooq from Quetta Chamber are trying to secure a ticket from Businessmen Panel for the post of president FPCCI.
He noted that banks prefer not to lend loans to the business community in Balochistan while opening LCs has become very difficult while UBG has done nothing to resolve the issue despite promises.
He said that the regional office of FPCCI in Quetta has been closed since February while a slothful branch office has been established in Gwadar with only two staffers.
The business community of Balochistan has been complaining stepmotherly attitude by UBG leaders but SM Muneer continue to focus on Karachi while others prefer Punjab for their activities, he said.
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Cyber attacks on banks expose weaknesses in online banking: PEW

Businesses asked to invest more in internet security to avoid losses
The Pakistan Economy Watch (PEW) on Sunday said recent attacks of cybercriminals on the banks resulting in heavy losses have exposed weaknesses in the online banking system.
It has also brought the need for enhanced internet security in the banking and other sectors to the limelight, it said.
After the attacks, around ten banks have stopped international transactions through their credit and debit cards which will add to the problems on consumers, said Dr. Murtaza Mughal, President PEW.
He said that all the businesses should improve cybersecurity while financial institutions should invest more in this sector under the supervision of the central bank to avoid theft of data.
Murtaza Mughal said that cybercriminals have always remained a step ahead of government agencies.
A recent report says that the internet security related losses which were $500 billion dollars in 2014 have surpassed 600 billion dollars in 2018.
The losses are set to increase to one percent of the global GDP by 2021 due to lax laws, low conviction rate and easy money, he said.
The government should invest more in cybersecurity and relevant laws should be improved to discourage the crime which has the potential to disturb banking industry, he demanded.
Dr. Mughal said that cybercriminals know no boundaries, therefore, overcoming it is not possible without international cooperation.
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