Reform agenda

LAHORE: After set back in Punjab, will the federal government still go on with the reform agenda, or it will reverse the increase in petrol and power rates like Imran Khan did while smelling an ouster.

National interest demands that the government should continue with painful reforms till it is in power. Any newly elected government would lack the muscle to take difficult but essential decisions.

Hopefully, the necessary reforms introduced by this government would not be rolled back by any government that assumes power after fresh elections. Prices have gone so high that small public appeasing measures do not appeal to the citizens.

The load of bad governance by the previous regime was passed on to the present government. The cost of living increased further during its tenure.

The relief people were expecting after the change of government never materialised. No government would be able to provide some relief to the electorate in the medium-term because of our precarious economy. Reforms are needed to increase the tax base and the tax amount.

Traders are the most stubborn segment of the society. They pay nominal tax or no tax at all. They operate in posh, medium, and small markets.

The ones operating from the posh markets pay an extremely high rent for the premises they operate from or own these premises worth millions of rupees. They maintain stocks worth millions of rupees but claim that they procured the stocks on credit from the suppliers.

These shopkeepers live a comfortable life. They live in posh societies, own luxury cars. Their children study in expensive educational institutions. Their children go to study abroad after completing education in Pakistan.

Yet the majority of them pay less tax than a person drawing Rs200,000 per month. Some pay nominal tax. They are not ready to register in the point of sales (POS) regime that links their sales with the Federal Board of Revenue.

In the first instance only, the posh markets should be targeted for fully documented tax compliance through the POS regime. There should be no exceptions.

This measure, if fully implemented, would increase taxes. All others may be allowed to remain within the fixed tax regime.

Present regime must ensure that all shops that fall under the fixed tax regime deposit their monthly tax regularly. Heavy penalties should be imposed on noncompliance. The next elected government thus would not have to make efforts in this regard.

Our major drawback is that we are short of resources mainly because of huge tax evasion. Every government that comes to power struggles to obtain heavy loans to perform official duties.

We must create these resources from taxes. Tax potential is there, but the nexus between businesses and corrupt bureaucracy is the major hurdle in this regard. Loopholes in tax laws must be plugged and discretions available must go. After that violation of rules would not be possible.

Anyone bypassing procedures or rules must be punished severely. We cannot move ahead without increasing our taxes to match our expenses. The present regime in whatever time is available must bring legislation to improve the tax regime.