Government’s tax collection efforts bordering extortion, says Kaiser Bengali

Economist Dr Kaiser Bengali on Monday addressed a press conference on Monday to explain his concerns that led to his decision to resign from three government committees that were formed by the prime minister to reduce government expenditures.

Speaking to the media at the Karachi Press Club, he said the foremost priority of the government must be stemming the fiscal haemorrhage was proving fatal for the economy. He lamented that the focus of the committees had shifted to retaining almost all the government entities but making them more efficient.

Dr Bengali also challenged the recommendation to abolish 150,000 BPS 1 to 16 low positions and privatise the Utility Stores Corporation saying that the entire burden of rightsizing was being imposed on the lower income strata of society and that there was no mention of any of the high cost positions of secretary, additional secretary, joint secretary, director general, etc. that needed to be eliminated.

He revealed that in his detailed report to the committees, he had recommended abolishing 17 divisions and nearly 50 government organisations that would have reduced a substantial number of BPS 20 to 22 positions and caused annual savings of over Rs30 billion in non-salary costs. He said the economy was in a state of collapse and had been surviving on a ventilator of debt.

He lamented that now, even the International Monetary Fund as well as friendly countries were reluctant to extend any further loans and the privatisation process has stalled because no one was bidding for state-owned enterprises. He added that a number of foreign investors were leaving the country and this was a process of reverse foreign direct investment.

In this scenario, he said people were unable to make their ends meet. He cited the cases of two family suicides in Punjab in one day on account of poverty.

The economist also criticised the highly aggressive tax mobilisation efforts saying that the methods being used bordered extortion.

The economy was structurally weak and could not generate more revenues, he said, adding that the answer to addressing the large budget deficit lay in reducing the government’s current expenditure, including non-combat defence expenditure.

Citing 2023-24 revised figures, he said the total gross tax and non-tax revenues were Rs12 trillion and the total current expenditure was Rs14 trillion leaving a gap of Rs2 trillion which had to be reduced.

He also announced that he would submit his tax returns one day late after the last date of filing tax returns in protest against the government’s non serious approach. He called upon all tax paying companies and individuals to do the same.