Value Proposition – Succeed in life

Unemployed or awaiting a promotion/pay rise?

Facing other challenges in your career? Watch & learn to excel.

File your Tax Returns for 2019

افراد، تنخواہ دار افراد اور ایسوسی ایشن آف پرسنز کے سال 2019 کے ٹیکس گوشوارے جاری کر دیئے گئے ہیں #FBR

File your #IncomeTaxReturn2019 & become a #filer.

Contact us at #MLCC for a seamless, professional & exceptional experience where experienced & top professionals including FCCAs, CFAs, FCMAs, CPFAs, CAs & Advocates will ensure that you all your matters are taken care of with highest standards of excellence.

For more details:

https://www.mlcc.pk/contact.html

Imran Trumps Trump

Links of Published Versions of Article:

By:

Omer Zaheer Meer,

CFA (USA), CPFA (UK), FCCA (UK), ACA (ICAEW – UK), AMLE (UK)

Even before Prime Minister of Islamic Republic of Pakistan, Mr. Imran Khan sat foot on the US soil, his charm offensive began. Undoubtedly it was a difficult trip. USA and Pakistan had grown apart over the years with the mistrust increasing by the day. From Salala to Aafia to Shakeel Afridi to nurturing the “eternal enemy” of Pakistan to siding with the Afghan Taliban, it was a downhill journey filled with complaints by both sides. Trump took office, believing he can do what none other could and make Pakistan dance to his tunes, even at the cost of our national interests. As the time passed and the global geo-political landscape started shifting, perhaps so did the advice he received and his perceptions.

Still, it was the Pakistan that India was up against and mind you, India has the economic “might” and swayed USA to its ways. Narendra Modi spent over 2000 crores building a campaign of “global isolation” targeting Pakistan with all his political experience, “wisdom”, economic might and strategic alignment with USA.

Then, along came Khan and it all changed. He delivered for Pakistan what no Pakistani Prime Minister before him could, even in more conducive circumstances and he did it with dignity and poise.

Then, along came Khan and it all changed. He delivered for Pakistan what no Pakistani Prime Minister before him could, even in more conducive circumstances and he did it with dignity and poise.

The first master stroke was delaying the IMF program and strengthening ties with Turkey, Kuwait, China, Iran, KSA, UAE, e.t.c. showing the USA that Pakistan can survive sans its aid and influence and will only talk on equal terms without having to compromise on its national interests for peanuts.

The next outstanding and brave move was to hold a public gathering in an arena in the USA, something that no Pakistani Prime Minister had ever done. Indian Prime Minister Narendra Modi did it with extensive resources and PR machinery. Khan did it better without any of that. He took commercial flight with a small team, stayed at Pakistan’s embassy and his party PTI organized the public gathering on its own.

This was not all. Khan used the opportunity brilliantly to pre-emptively counter the narratives of the opposition by highlighting his anti-corruption drive back home as well as his vision for a rising Pakistan. The results were astounding. Trump in his meeting, wished him success for his anti-corruption drive and couldn’t help but keep using the term “very popular leader” for him. Trump seemed to have been trumped by Khan. The opposing narrative built carefully and with the help of expensive PR firms died before it could even begin during this trip.

Put simply, Imran Khan won over the United States of America even before he and Donald Trump spoke about the key issues facing both countries and laid the groundwork for a proper and long-term bilateral relationship. In the words of Adam Gerry:

In a country (USA) that since 9/11 was programmed by the controlled news media to hate Islamic Republic of Pakistan, in the same country where Islamic societies are often misunderstood and in a country where arenas are usually filled with sporting or music events rather than anything remotely political, Imran Khan stole the show. Even if his rally was played for few seconds on America’s notorious television news programs, this has been a great victory for Pakistan. Because all it takes are a few seconds of footage from that Imran Khan rally to change perceptions of Pakistan from one that is wholly negative to one that is self-evidently optimistic and indeed one that is truly inspirational.

Prime Minister Khan has done something for Pakistan that let alone his countrymen or contemporaries, even the European allies of the USA find hard to do. He conquered the heart and soul of America with his charm offensive coupled with his dignity and topped up with his poise and sincerity.

Even forgetting Khan’s confidence and poise or even wearing of the national dress of Pakistan and the game-changing public gathering in USA, the way he put forth Pakistan’s case and advocated for us all was heartening.

He was put a tough question on Iran and handled it intelligently, keeping a balance and pushing forward the case for peace in the region. Faced with the question about 3000 American deaths in Afghanistan, he reminded the world of over 70,000 Pakistani lives lost. Asked about Shakeel Afridi, he raised the issue of Aafia Siddiqui just as he had promised to do.

That was not all, faced with questions, planted to attack the institutions, he brilliantly defended Pakistan. On the issue of PTM activists, he highlighted the initiatives taken for FATA including the mainstreaming and the breach of law by PTM activists. It was not just that he did it all without any paper slips but that he did it in a manner which reflected his sincerity, confidence and conviction. And these were what won over the Americans just like they won over the Pakistanis.

Some critics pointed out that he did not get any “money”. They’re right. Infact he openly shared that he didn’t even ask for any aid but he won something much greater for Pakistan. He won the respect of the global super power and the western world with a seat for Pakistan on global stage ensuring Pakistan is both heard and respected. And let me share, if handled properly, this foundation laid by PM Khan during his maiden USA visit can lead to a dynamic and successful foreign policy leading to long-term economic and trade benefits for Pakistan.

The writer is a leading economist and experienced tax expert who holds five top professional finance, investment and accountancy qualifications CFA (USA), CPFA (UK), FCCA (UK), CA (ICAEW) & Anti-Money Laundering specialization along-with substantial international exposure and represents Pakistan on Global Tax Forum while sitting on the boards of several think-tanks. His profile can be accessed at: https://omerzaheermeer.wordpress.com/about

Iqbal the Economist & his solutions for Pakistan– Part II

Links of Published Versions of Article:

By:

Omer Zaheer Meer,

CFA (USA), CPFA (UK), FCCA (UK), ACA (ICAEW – UK), AMLE (UK)

Continuing from the last week, Allama Muhammad Iqbal, the sage of the nation, further pointed out the key problems as well as their workable solutions as outlined below:

5. Opportunity Cost

In economics the opportunity cost is the cost of the opportunity lost in order to avail another one. For example if we build a plaza on an agricultural area where we could alternatively cultivate wheat, the opportunity cost of building the plaza would be the lost production of the wheat for the foreseeable future which we could have alternatively done and made use of. This needs to properly considered in all economic decisions. It’s good to see that PM Imran Khan has taken a leaf from Iqbal’s philosophy and incorporating that within the construction bye-laws prohibiting construction on agri-lands, hence accounting for the opportunity costs regarding food safety.

6. Austerity

Pakistan is caught up in the crisis of underdevelopment in the face of vast unlimited resources. One important strategy to adopt as per Allama Iqbal is austerity, as a guiding inflexible rule to allow resources to go into economic construction. Iqbal was a great champion of this cause and recommended it time and again. This, besides other factors help in building public trust. PM Imran Khan also champions this idea to build public trust.

7. Land Reforms

Iqbal didn’t shy away from the controversial topic of land reforms either. Infact, he backed these reforms to facilitate the oppressed class of peasants. It will be a befitting tribute to the memory of Iqbal if we develop an equitable system of agriculture in which the cause of peasants is well looked after for ensuring social justice for the peasants and for making a major break-through in boosting agricultural production.

Iqbal argued for radical reforms arguing that land as a means of production should be owned by the society for the benefit of all. “al-Ardu Liliān” (“The Earth is God’s”), is a poem in Bal-i-Jibril, which sums up this idea about land ownership.

در خدایا! یہ زمیں تیری نہیں، میری نہیں!
تیرے آبا کی نہیں، تیری نہیں، میری نہیں!

(To God, this land is not yours, nor mine,

Not thy ancestors’, not yours, nor mine)

If these core elements of Iqbal’s economic philosophy are properly implemented, there is no reason why Pakistan cannot progress on the path of economic prosperity

8. Rural Development

Iqbal also argued that the development of rural areas is at the heart of the economic and social development of a country. He analyzed that it does not only mean agricultural growth but it’s also about improv­ing of the economic and social conditions of the rural population by way of rising incomes and providing them with necessary ameni­ties like good houses, paved streets, water supply and sewerage, health services, education, roads, power, communication,’ etc.

9. Industrial Development

The cause of industrial development was very close to Iqbal’s heart. He considered the develop­ment of industries essential for mitigating the curse of unemploy­ment. On many international platforms there were talk of indigenous technology during his era, which are now wrongly associated with Mahatma Gandhi. The historical fact is that Iqbal was the author of this concept at the time. Examine the excerpt below from one of his speeches:

“We spend practically nothing on industry. And as I have said before and as many other speakers have pointed out, indus­trial development alone can save us from the curse of unemploy­ment. There is a good future for weaving industry and for shoe-making industry in this province and if we encourage these industries, I think we shall be able to save the province from unemployment, provided we protect these industries against Cawnpore and Ahmedabad.”

10. Skilled Workers

Iqbal was unequivocal on this issue. He said that Muslims must take to industry and craftsmanship. “In my eyes,” declared Iqbal, “the hands of a carpenter, rough and coarse due to the constant use of the saw, are far more attractive and useful compared to the soft and delicate hands of a scholar, which never carry more than the weight of a pen.”

11. Global Exploitation

Furthermore, Iqbal had also analyzed protective trade tariffs and global economic exploitation of weaker nations by the stronger ones. His couplet below depicts his state of mind regarding the exploitative attitude of the Western economies and his dreams for the economy of Pakistan:

دیار مغرب کے رہنے والو خدا کی بستی دکاں نہیں ہے
کھرا جسے تم سمجھ رہے ہو وہ اب زر کم عیار ہوگا

(O, Residents of the West! God’s earth is not a shop;

The gold you think to be genuine, will now prove to be debased)

To sum it up, the key principles of Iqbal’s economic model are as below:

  1. Having strong bond of trust between the state & citizens (core issue of Pakistan particularly in the context of the revenue collection agencies).
  1. Human Capital & Human Development (which is a key with the present youth bulge in Pakistan).
  1. Interest Free Business Eco-System (this warrants a detailed writeup but Akhuwat’s model is something we can begin with as a recent success story to replicate, beginning with pilot projects).
  1. Poor Centered Policies (inclusive economic policies resulting in justice and peace which in turn produce a conducive business environment leading to economic upturn).
  • Self-reliance which is the core of Iqbal’s philosophy and economic model.

If these core elements of Iqbal’s economic philosophy are properly implemented, there is no reason why Pakistan cannot progress on the path of economic prosperity. How can that be done and where to begin with are the concluding areas we’ll discuss in the last part of this series.

The writer is a leading economist and experienced tax expert who holds five top professional finance, investment and accountancy qualifications CFA (USA), CPFA (UK), FCCA (UK), CA (ICAEW, UK) & Anti-Money Laundering Specialization along-with substantial international exposure and represents Pakistan on Global Tax Forum while sitting on the boards of several think-tanks. His profile can be accessed at: https://omerzaheermeer.wordpress.com/about

Iqbal the Economist & his solutions for Pakistan– Part I

Links of Published Versions of Article:

By:

Omer Zaheer Meer,

CFA (USA), CPFA (UK), FCCA (UK), ACA (ICAEW – UK), AMLE (UK)

Allama Muhammad Iqbal is known to us as a marvel of excellence in all the fields he worked in. He is the visionary who dreamed of Pakistan, the famous Poet of the East, a top philosopher, a revered scholar, a politician, a parliamentarian par excellence and even a spiritual guide for many. Thanks to the recent pioneering work published in the book of my honorable father Mr. Zaheer Ahmad Meer Advocate, titled “The Great Lawyer – 106 Reported Cases of Allama Muhammad Iqbal”, we’re now aware that he was a Great Lawyer too. 

However, what most of us may be unaware of, is the fact that he was also a fine proponent of economics. He wrote his first book on Economics titled “Ilm ul Iqtisadiyat” or “Science of the Economics” in 1903 in Urdu, at the age of just about 26 years old, when no one was doing such work even in English in the sub-continent.

Unfortunately, this first ever book on economics in Urdu language, largely remained unnoticed, not to be realized, never to be properly acknowledged.

Let us remember that during Iqbal’s era, the classics of Adam Smith, John Stuart Mill, Ricardo and Alfred Marshall were taught all over Europe. But in the Indo-Pak subcontinent even teachers and scholars had only a hazy idea of this subject. Actually, it was not even introduced at the University level anywhere in the Indo-Pak subcontinent baring three universities. 

Unfortunately, this first ever book on economics in Urdu language, largely remained unnoticed, not to be realised, never to be properly acknowledged

It is therefore spellbinding that Iqbal had such deep insights into the subject of economics and the economic plight of the Muslims of the sub-continent. He was deeply concerned with the unequal income distribution that turned the rich richer and the poor poorer, a challenge we still face across the globe and in our homeland, Pakistan. The mere writing of ‘Ilm ul Iqtisadiyat’ renders him economist in the same-way as the Wealth of Nations (1776) made Adam Smith an economist, or the Das Captia portrayed Karl Marx as one; albeit the context eventually differed.

Iqbal also pointed out on 28 May I937 that: “The problem of bread is becoming more and more acute. The Indian (Muslim) has begun to feel that he has been going down and down during the last 200 years. Ordinarily he believes that his poverty is due to (Hindu) money-lending or capitalism. The perception that it is equally due to foreign rule has not yet fully come to him. But it is bound to come.”

Allama Iqbal, the learned enigma and a great thinker of Islam, was actually the first economist of the Indo-Pak subcontinent to raise his voice against the exploitation of Muslims by domestic and foreign classes controlling the means of production.

While, Dr. Muhammad Iqbal was anti-Imperialism in his thought process, yet he was able to point out the key problems as well as draw up workable solutions to address them.

1. Welfare based wealth

Iqbal presented the concept of welfare based wealth, distinguishing it from the traditional wealth.  An example to elaborate the concept would be that if skilled labor were enslaved for forced labor, it’ll increase the national wealth but will be detrimental to the welfare based wealth of the citizens and wider humanity. Similarly a pledged property may be accounted for as the wealth of the creditor in the event of a default but won’t meaningfully impact the overall wealth of the state.

2. Population Control

Surprisingly, Allama Iqbal also pointed out the excessive increase in population as a core issue at times of saturating economic resources, in an era when no one in the Islamic world did that. He very logically explained that while increase in population can be productive in a scenario of untapped or plentiful economic resources, it becomes counter-productive economically when the situation reverses, unless, other economic avenues can be explored to further create economic opportunities for growing population.

We can all appreciate, how this issue identified in 1903, has become a core economic concern for us in 2019, albeit 116 years later. I ask you all, what else do you call vision & foresight, if not this?

3. Economic Equilibrium in local context

Iqbal also advocated that a research-based analysis can determine the equilibrium in various sectors of the economy and modes of factor pricing as per the local context. Yet, at the same time he also urges to focus upon human development through exploration and preservation of natural resources and improving human and societal relations. By doing so, Iqbal practically envisioned today’s HDI (human development index).

4. Specialized Production/Services

Iqbal has also put forth various strategies used by recent economic success stories. For example, he discussed regional specialization in producing goods and services and brought in the notion of comparative cost, concepts that China practiced in its economic resurgence. This basically advocates for a country or its federating units, e.t.c. to focus its expertise in their specialzied area of production/services while accounting for the opportunity cost of producing that good or service in order to achieve economic optimization.

The writer is a leading economist and experienced tax expert who holds five top professional finance, investment and accountancy qualifications CFA (USA), CPFA (UK), FCCA (UK), CA (ICAEW, UK) & Anti-Money Laundering Specialization along-with substantial international exposure and represents Pakistan on Global Tax Forum while sitting on the boards of several think-tanks. His profile can be accessed at: https://omerzaheermeer.wordpress.com/about

Tax Amnesty: Results, Challenges faced & Follow-up required

Links of Published Versions of Article:

By:

Omer Zaheer Meer,

CFA (USA), CPFA (UK), FCCA (UK), ACA (ICAEW – UK), AMLE (UK)

With the deadline for declaring undisclosed assets, sales and expenditures under the Asset Declaration Ordinance, 2019 (commonly referred to as Tax Amnesty scheme) being over, it’s time to analyze the results, experiences during the process and the follow-up required.

Asset Declaration Ordinance, 2019 was promulgated on 14th May 2019. The stated aim of the initiative was to bring new people, previously unregistered, within the tax-net voluntarily. The initial response just like the 2018 Tax Amnesty scheme was lukewarm, perhaps owing to both the lack of clarity and the Ramadan and Eid festivities.

Initiatives that showed intent

Thankfully, following our advice, the concerned quarters ran public information campaigns and announced that they had successfully integrated databases of various authorities in the country and now also possessed the information gained via OECD multilateral convention about Pakistani residents’ offshore accounts and are further strengthening the mechanism to launch a compliance drive immediately following the amnesty. An adjudication authority for enforcement of The Benami Transactions (Prohibition) Act, 2017. This, after a lapse of almost two years since the law came into being, signaled the seriousness of the government for enforcement action.

The scheme, however, really took off in the last ten days of June 2019 with the seriousness of the Government in enforcement becoming even more clearer and the arrests of top political figures by NAB and stringent sentence in corruption case of ex bureaucrat by the Supreme Court of Pakistan sending strong messages.

The promised enforcement action coupled with structural reforms to eliminate taxpayers’ harassment and to rationalize the tax system should be undertaken. Without these measures, this scheme would be remembered as just another one in the history of the amnesties launched in Pakistan. However, with the right approach and actions this can become the turning point for the taxation compliance culture in Pakistan”

Moves that backfired

NADRA and FBR then tried to further shore up these efforts by launching their databases. NADRA launched its database first with initially a fee of Rs. 500 to access the records of a person held by NADRA. Unfortunately, it was a disaster due to the lack of data and the people were taken aback that if this was the data held by the authorities then nothing much has changed. The move backfired big time. Many people started talking of taking a “risk” believing that the claims are a façade.

Next came the FBR database, free to access. The quality of data was better than NADRA’s database but was still very weak. However, FBR atleast did the sensible thing of posting a message that it was not a complete profile and that the details were still being populated from the database. A rumor was also spread claiming that whoever logged in to the databases would be recorded and followed up by the FBR. This negativity infact saved the day with people starting to avoid checking their profiles and simply preferring to avail the scheme to streamline their affairs.

Experiences and Challenges

Despite these setbacks, most of the people, including those belonging to the powerful segments as retired military officials, bureaucrats, judges, journalists, e.t.c. were flocking to avail the scheme. Just a clarification that the bar on Government employees’ being excluded from the scheme was for those currently serving or retired within the last 10 years.

With the results showing healthy signs and uniform demands of an extension from all professionals, tax practitioners, legal fraternity, chartered and chartered certified accountants, businessmen, e.t.c., the Government did the best it could in the face of the IMF pre-conditionality of no Amnesty scheme during their program, which was an extension of 3 days, till 3rd July 2019. The response erupted!

People were literally running from pillar to post to avail the scheme in the last few days which led to regular breakdown of the online system of FBR (IRIS). With extreme load on the last day, the system constantly got choked. Furthermore, a confusion led to the rumors of the systems being partially shutdown at 5 PM on 3rd July 2019 instead of the usual tacit understanding of the English calendar’s end of day at 11:59 PM, in line with the past practices of the FBR. This led to atleast 6,000 applications of the already paid tax being stuck in the system with tens of thousands not being able to submit. Mr. Shabbar Zaidi, the FBR Chairman, allowed the processing of the former while the fate of the latter remained unclear to this moment.

 The Results

Despite all the challenges, the scheme became the most successful in terms of the numbers availing the scheme and the new tax registrations being issues. At the time of publication, 137,000 people had availed the scheme compared to 84,000 over a much larger duration in the 2018 amnesty scheme. Out of the 137,000, almost 100,000 were new tax registrations. With the stuck cases being cleared, the number is expected to grow from 137,000 to closer to 150,000. Almost $ 20 billion worth of previously undisclosed assets were declared. However, the tax collection was less compared to the 2018 scheme owing to the low rates of this scheme (1.5% – 4% for most asset classes) compared to the last one’s 5%.

Way Forward

The challenges faced during this scheme should be studied, and lessons learned for the future particularly about the capacity building of the state institutions both in terms of the human resource and the technology. The promised enforcement action coupled with structural reforms to eliminate taxpayers’ harassment and rationalize the tax system should be undertaken. Without these measures, this scheme would be remembered as just another one in the history of the amnesties launched in Pakistan. However, with the right approach and actions this can become the turning point for the taxation compliance culture in Pakistan.

The writer is a leading economist and tax expert who holds five top professional finance, investment and accountancy qualifications CFA (USA), CPFA (UK), FCCA (UK), CA (ICAEW, UK) & Anti-Money Laundering Specialization along-with substantial experience and represents Pakistan on Global Tax Forum while sitting on the boards of several think-tanks. His profile can be accessed at: https://omerzaheermeer.wordpress.com/about

Fiscal Reforms: Key Taxation Trends in Pak in need of Reform

Omer Zaheer Meer,

CFA (USA), CPFA (UK), FCCA (UK), ACA (ICAEW – UK), AMLE (UK)

Links of Published Versions of Article:

With the ongoing budget debate, there is increased focus on the need for fiscal discipline and reforms to be achieved chiefly by a turnaround in the taxation system of Pakistan. Generally speaking, taxation laws are set of laws to derive revenues for the Government to function & service the citizens with the aim of improving their quality of life while continuously improving the facilities and infrastructures provided.

“Winning the confidence of the masses, removing the fear of harassment and changing the ill-repute of the FBR are the biggest challenges. Without these, no reforms can work to achieve the full potential of our taxation system

Pakistan has a complex taxation system with a focus on indirect taxes with over 70 different taxes. This has led to several sets of laws dealing with specific taxation areas. Below are some major issues in dire need of major reforms to achieve our taxation potential:

  • Extremely Low Numbers of Income Tax Returns Filers:

From approximately 3.5 million income tax returns filers to just above 1.4 million for the (last complete) tax year 2017 with a filing deadline ending in 2018, this is an area of major concern. The filing for tax year 2018 is still ongoing. In a country of over 220 million, this amounts to just 0.6% of the total population and is troubling.

Some steps have been proposed in the budget 2020 to address this challenge including requirement to register for tax after undertaking some transactions and the duty of the FBR to register those who paid withholding taxes but are not registered for NTN using the data to compute the imputed income.

  • Undocumented, Black economy:

This builds up from the above issue of low return filers. A larger proportion of the economy, some estimates put the number close to 100% of the GDP, is believed to be undocumented black economy. This by any standard is massive and a point of major concern. Low literacy rate, a fearful reputation of FBR, low public service delivery and rampant corruption are amongst the major reasons for this massive level of black economy.

The steps proposed in the budget to counter this include the key move to require any property transaction over 5 million to be done through banking channel otherwise hefty penalty and tax losses would be incurred.

  • Taxation Complexities and Ease of Doing Business:

As mentioned above, Pakistan has a very complex taxation system and as per the data by the World Bank, has placed the country on 136 which though an improvement from the ranking of 147 out of 190 countries, is still worrying. The complex, non-harmonized and multi-layered laws in operations not only make it more expensive but also time-consuming for the businesses.

Registering a business for taxation particularly sales tax is a very complicated and HR driven in this age of technology and when we already have databases and systems like IRIS and STRIVE in operation by the FBR. Steps needs to be taken to automate and facilitate these processes.

  • Harmonization Issues:

The issue of lack of harmonization among various taxation laws has increased many-fold post the devolution of Sales Tax on Services regulation and administration to the provinces and each Province setting up its own Revenue Authority for the same, as a result of the 18th Constitutional Amendment. In an era, when countries are agreeing to facilitating arrangements on the likes of European Economic Area, making borders irrelevant in terms of economic activities, Pakistani businesses are facing the challenges of a gone era while expanding their businesses in other provinces within the same country. The regulations are as if these are not the provinces of one country but different countries sans economic treaties.

There needs to be harmonization between various provincial taxation bodies among themselves as well as with the FBR on various issues particularly that of jurisdiction and tax adjustments. This should also lead to rationalization of tax laws in a harmonizing manner.

  • High Costs of taxation:

In addition to having one of the most complex taxation systems in the world, Pakistan also has high taxation rates compared to other countries in the region. This adversely impacts the investment climate and business eco-system in the country.

Furthermore the taxation rates are also several times that of the cost of tax avoidance in the country, making it an attractive proposition for some businesses to keep operating beyond the radar of the legal economy.

Moreover, the highly complex nature and high-handedness of the taxation regimes also translates into further costs for taxpayers in terms of the time and administration required to ensure compliance. Even from a pure business perspective, this makes tax avoidance an attractive proposition keeping in view the weak and slow judicial system.

  • Structural Issues:

The structural issues including confusing and highly subjective taxation laws, focus on indirect taxes, the ancient systems, mal-practices, singular focus on revenue collection, harassment of the existing taxpayers rather than using the same resources to focus on expanding the tax base and a general ill-perception have all contributed to the current state of affairs and needs to be reformed if the situation is to improve.

Winning the confidence of the masses, removing the fear of harassment and changing the ill-repute of the FBR are the biggest challenges in this regard. Sans these, no reforms can work to achieve the full potential of our taxation system.

  • Conclusion:

The above issues require serious efforts to address the critical issues concerning the taxpayers particularly the businesses in the country. With CPEC and its associated possibilities materializing, now is a good time to ensure these reforms are put to action to achieve the full potential of not only the existing economy but also the developments accruing. We’ve been discussing the possible proposals for reforms and share more in the next issue. Till then, we leave our readers to ponder over this topic.

The writer is a leading economist and experienced tax expert who holds five top professional finance, investment and accountancy qualifications CFA (USA), CPFA (UK), FCCA (UK), CA (ICAEW, UK) & Anti-Money Laundering Specialization along-with substantial international exposure and represents Pakistan on Global Tax Forum while sitting on the boards of several think-tanks. His profile can be accessed at: https://omerzaheermeer.wordpress.com/about