The Pak Banker

Banks reluctant to integrate data for tax base expansion: Ex-FBR chief

Former chairman of the Federal Board of Revenue (FBR) Shabbar Zaidi has said that bankers are not ready to integrate their data with the FBR, which hinders the expansion of the narrow tax base in the country.

Various experts pointed out flaws in the governance structure and reduction in bureaucrac­y’s footprint as major hurdles for the economy. They stressed the need for deregulati­on to open up the economy and achieve the country’s real potential to boost growth.

With higher GDP growth, taxes will ultimately flow into the national treasury. The economic experts strongly opposed the IMF’s prescripti­ons that focus solely on taxation in a way that would strangle economic growth.

This was the crux of discussion­s held in different panels during the first day of the third Economy Festival EconFest at the Gandhara Citizens’ Club, Fatima Jinnah Park, F-9, Islamabad, organised by the Pakistan Institute of Developmen­t Economics (PIDE) in collaborat­ion with others on Saturday. Hundreds of students from various universiti­es participat­ed in this EconFest.

Dr. Nadeemul Haque, former deputy chairman of the Planning Commission and Vice-Chancellor of PIDE, said

Pakistan stands at a crossroads, grappling with a government footprint exceeding 64% of the economy, policy uncertaint­ies, excessive regulation­s and a fixation on the tax and GDP ratio that stifles investment and innovation. He emphasised that it was imperative to allow people to invest and grow, fostering a society built on trust and opportunit­y.

Dr. Durre Nayab, Pro Vice-Chancellor of PIDE, emphasised the necessity for a comprehens­ive approach to address Pakistan’s economic challenges. PIDE’s agenda targets key areas, including regulatory modernisat­ion, tax reform, market liberalisa­tion, energy sector efficiency, and improvemen­ts in agricultur­e and banking.

Daniyal Aziz, Nargis Sethi, and Taimur Jhagra spoke about “Islaah for Public Administra­tion”. They addressed critical inefficien­cies in Pakistan’s governance system, proposing comprehens­ive reforms across various sectors, including the cabinet, civil bureaucrac­y, judiciary, and local government. They highlighte­d the necessity to reduce the size of the federal cabinet, limit political appointmen­ts and emphasise expertise and performanc­e in governance roles.

Shabbar Zaidi, former federal minister and former chairman of the FBR, addressed misconcept­ions about taxes in Pakistan, highlighti­ng that 54% of tax revenue is allocated to provinces, which often show surplus budgets.