Ahsan calls for fundamental transformation of tax system

Federal Minister Ahsan Iqbal urged for a radical overhaul of Pakistan's tax system, development planning, and economic framework, cautioning that the nation cannot attain its objective of a USD 1 trillion economy by 2035 through incremental policies. At a meeting on the Uraan Pakistan national economic mission, digitalization was emphasized as the key to rapid growth, rather than a slow, plodding pace.

Tax reforms, dubbed Mission 2, were highlighted as a crucial component, serving as the financial engine for the entire program. Iqbal emphasized that boosting revenues through dependable and efficient sources was essential, as without it, the resources needed for the remaining missions could not be provided. He maintained that achieving the USD 1 trillion target would necessitate a complete transformation of the entire economy, moving away from conventional approaches and embracing a technology-driven, digital economy.

Despite acknowledging economic stability, he argued that the current level of stability was insufficient for sustainable growth. Iqbal highlighted the shrinking development budget as a significant challenge, noting that in 2018 it constituted a larger share of the GDP compared to the present. He questioned the sustainability of launching new projects when existing ones remained unfinished and stressed the need for creating new resources and effectively mobilizing existing ones.

The minister credited the government's efforts, under the prime minister's leadership, with improving tax collection performance over the past two years. However, he stressed the importance of increasing the tax base and revenue collection while reducing tax rates. Digitalization was seen as a central tool for broadening the tax base, improving documentation, and mobilizing resources more efficiently.

Iqbal also emphasized the urgency of increasing exports, stating that rapid economic growth could not be achieved without a substantial rise in exports. He directed the Ministry of Planning to develop a comprehensive national development plan, with the guidance of the prime minister, to ensure effective implementation.