PM Imran Khan says taxes vital for country’s economic stability, survival

ISLAMABAD: Prime Minister Imran Khan on Tuesday stressed taxes are vital for the country’s economic stability and survival, saying that the absence of a "tax culture" in Pakistan puts  the country's sustainability at stake.

The premier expressed these views while addressing the launch ceremony for Federal Board of Revenue's (FBR) track and trace system in the sugar sector. 

The system introduced by the FBR will ensure the electronic monitoring of the production and sale of sugar.

PM Imran Khan  hoped that the use of technology will help check tax-pilferage and take revenue collection to the tune of Rs8,000 billion per annum.

“Our biggest issue is that we have to take loans to run the country. Countries cannot be run without taxes. We have our stability at stake,” he remarked.

He congratulated Advisor to the Prime Minister on Finance Shaukat Tarin, FBR, and other relevant institutions for introducing the technology-based system for which the efforts were being done since 2008.

The premier said that the introduction of the track and trace system was a big and positive achievement, which will have a far-reaching impact.

He said that with a reasonable tax-to-GDP ratio in the West and highest in Scandinavian countries, Pakistan could not promote the tax culture due to different reasons including the aristocratic lifestyle of the ruling elite in the past, which shattered the confidence of taxpayers in governments.

The practice of not paying due taxes has continued since the colonial era when people used to think that their hard-earned money was being taken out by the foreign rulers and they were not being provided basic facilities, he remarked.

Speaking of the challenges Pakistan faces, he said the foremost issue that the government has to deal with is that "it does not have enough money to run the country, which is why we have to take loans".

He likened the situation to a household which continues to struggle due to financial constraints and never is able to advance since it never has enough savings to invest in the future.

'Pakistan's sustainability at stake'

"It is so important that this culture is developed in Pakistan because our very sustainability is at stake here," he said, adding that in between 2008 and 2018, Pakistan's debts saw a four-fold increase.

"It astonishes me. These people (past rulers) should be punished. In 10 years, the debt which stood at Rs6 trillion soared to Rs30 trillion," the prime minister added.

He said that all the while, "no big projects which could benefit the country were introduced".

"So our challenge was tax collection and I laud the FBR team for a record tax collection," he said, adding that the government aims to take it to Rs6,000 billion.

PM Imran Khan said, of this amount, Rs3,000 billion will go to debt repayments. "And we will be left with Rs3,000 billion for a population of 220 million," he said, adding that their health, education needs and infrastructure needs will need to be served.

"And then we need to invest, in research and agriculture, which has so much potential," he said.

The prime minister said without enough money to support all these projects, the government ends up having to take loans "and we remain in this vicious cycle".

"The only way it will break is if we ramp up our tax collection," he said, adding that that will only be possible with the use of technology and the track and trace system marks a big step in that direction.

Speaking of the youth, he said that they will end up being the "engine of growth" for Pakistan and will need to be invested in, which is only possible through more earnings.

The premier said that the government is working full throttle to bring down the luxury lifestyles of the ruling elite for which an austerity campaign is in full swing. Pointing in the distance, he said the expenditures of two offices of the FBR have "witnessed a reduction of Rs1.1 billion, despite inflation".

He said that when the people see that money is being spent on them and taxes are for the welfare of the people, the change in perception will come automatically.

No bag of sugar can be taken out from production site without identification.

Earlier, a statement issued by the Prime Minister's Office said that the system will also be used to monitor the goods' movement from production to sale in major sectors like fertilizers, and cement in the next phase.

"The scope of electronic surveillance will extend from the production of goods to the utilisation by the consumers, which will enhance the country's revenue generation, bring transparency in the system and prevent tax evasion," the statement said.

After implementing the track and trace system in the tobacco sector, FBR is now rolling out the electronic monitoring in other major sectors like sugar, it added.

FBR is also planning to introduce the system in the beverages and petroleum products sectors soon.

As soon as the system starts working in sugar sector, no bag of sugar will be able to be taken out from production site, factory or manufacturing plant without stamps and individual identification.

It is pertinent to mention the track and trace system went into effect on November 11, 2021.