" Bangladesh Ke Muqablay Mein Hum Bohat Hi Neechay Hain. ." Sabiq Governor Muhammad Zubair
" Bangladesh Ke Muqablay Mein Hum Bohat Hi Neechay Hain. ." Sabiq Governor Muhammad Zubair
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00:00You are saying that it will be more difficult in 2024 and we will have to face more difficulties.
00:05The difficulties have come to the fore.
00:07What will be the situation after 1,500 Arabian taxes are imposed?
00:15After that, it is obvious that when taxes are imposed so much, there are two ways to increase taxes.
00:21Every country increases its taxes year by year.
00:27Because your expenditure is increasing.
00:29To manage that, you have to increase your tax revenue.
00:32So there are two ways to increase tax revenue.
00:35One is the good way that you encourage economic activity so much that the economy expands.
00:44And because of that, taxes come automatically.
00:47And many countries are like this.
00:49And this has been tested in Pakistan as well.
00:51For example, if there is a tax rate of 20% on someone,
00:56or 30% on a businessman,
00:59then reduce the tax rate so that people invest more,
01:04so that economic activity increases, and so that there are more tax collections.
01:08That is the right way.
01:11The second way that Pakistan is going to adopt is that the economy will not grow so much.
01:15If the economy does not grow so much, then what choice do you have?
01:18The only choice is that you impose more taxes on the sectors that are already there.
01:22To impose more taxes means that it will be expensive.
01:27And it will be very expensive.
01:29You will increase the cost of electricity, you will increase the cost of gas.
01:32When you impose taxes on other things, then that tax will pass on.
01:36It will pass on to the public.
01:37How will it pass on to the public?
01:39Because of the increase in prices.
01:42You are correct that the result of business activity should be taxed.
01:46Instead of imposing taxes on those sectors.
01:49But you are talking about business activity.
01:51Now there are some FDIs, Foreign Direct Investments,
01:54coming from Saudi Arabia, UAE,
01:57the rich people of Qatar and Kuwait will come to Pakistan.
01:59Do you think that this will be able to balance it somehow?
02:02Because no political party will want to take an unpopular decision.
02:08First of all, Anika, let me tell you that FDI may come,
02:11but in the short run, we are not able to see any such thing.
02:17The amounts that you are talking about,
02:20it was said earlier that it has been a long time since we have seen it,
02:23but we have not seen it yet.
02:24Because this translation is a very big step.
02:27Just saying this to someone,
02:29and even if our friends from other countries want to invest,
02:32it is not so simple for them to come and start investing.
02:37The second thing is that FDI cannot balance off the lack of economic activity.
02:43The first thing is that investment,
02:46there is a basic principle,
02:48that domestic investors take the first step,
02:50and then foreigners come.
02:52It does not happen that first foreigners come,
02:54and then domestic investors come.
02:55So domestic investment is not happening.
02:57The current state of investment,
02:59which is ending last year,
03:01is the lowest level of our investment to GDP ratio in 50 years.
03:06It is the lowest level.
03:07And this is the most concerning thing,
03:09that there will be no investment.
03:11If you compare it with Bangladesh,
03:13if you compare it with India,
03:15then we are very low.
03:17So there will be investment.
03:19If you keep working on the most important thing,
03:25but the most important thing is that
03:27the sectors in which you want to do reforms,
03:30there is no change in their name.
03:32It is necessary to do tax reforms,
03:34so that all those sectors…
03:36Right.
03:37Let's talk about reforms.
03:39Tax reforms,
03:40in our country,
03:41at this time,
03:42there is a lot of pressure on the salaried class,
03:44that you have to give.
03:45But there are a lot of sectors,
03:46which you have subsidized.
03:48There are a lot of sectors,
03:49which they have to export,
03:51especially exporters,
03:52they do not export,
03:53but they are getting a lot of discounts,
03:55they are getting tax exemptions.
03:57Do you think that our tax system,
04:00if it is tried to be corrected,
04:03then due to cartelization,
04:05it can be corrected?
04:06Have you seen the retailers?
04:07What happened?
04:10Look, the first thing is that,
04:12what I said in the beginning,
04:13that whichever new government was to come,
04:15whichever party was to come,
04:16now it is PMLN,
04:17they have to take very strict decisions.
04:20Now, for Pakistan,
04:22it is Naghuzeer.
04:23Otherwise, if you do it now,
04:25if you don't do it,
04:26you will perish.
04:27The situation is so bad.
04:28So, the difficult decisions that are made,
04:30whether they are on traders,
04:31whether they bring real estate,
04:33or other sectors,
04:34which are almost out of the tax net.
04:37Look, agriculture,
04:38I will give you a simple example.
04:40Agriculture contributes about 20% towards GDP.
04:43And in tax,
04:44it contributes less than 1%.
04:46So, there is a mismatch.
04:48Similarly, if you see,
04:50our salaried class,
04:51their tax contribution,
04:54that is more than the total of exporters,
04:57who pay tax,
04:58and traders.
04:59Now, this is such a big mismatch.
05:00Now, this is not how the world works.
05:02Your educated class,
05:04who are encouraged by you,
05:06to bring more people,
05:07in the salaried class,
05:08middle class,
05:09one becomes yours,
05:10then the country develops,
05:12that pays more tax.
05:13But Mr. Zubair,
05:14then there will be a problem here.
05:15There will be a problem here.
05:16I am sorry I am cutting short.
05:17But there will be a problem here.
05:18The problem is that,
05:19if you bring exporters,
05:20or industrialists,
05:21in the tax net,
05:22then they will say,
05:23okay,
05:24we will go to Africa,
05:25and set up our mills,
05:26in Bangladesh,
05:27and set up our mills.
05:28For us,
05:29the cost of doing business there,
05:30is very low,
05:31in comparison to here.
05:32And then,
05:33you are saying,
05:34the domestic investor,
05:35should take initiative first,
05:37even before foreign direct investment.
05:39So,
05:40that percentage will not be reduced.
05:41How do we deal with this?
05:43You are saying,
05:44we have to take difficult decisions.
05:45But difficult decisions,
05:46where do we start?
05:47You are right.
05:49You are right.
05:50When our investor,
05:52is a big businessman,
05:53he has legitimate questions.
05:55For example,
05:56he says,
05:57the electricity in Pakistan,
05:59for a businessman,
06:01if we compare it with Bangladesh,
06:03if we compare it with India,
06:05then we are much more.
06:06So,
06:07we cannot compete.
06:08How can we compete?
06:09Now,
06:10obviously,
06:11managing electricity,
06:12and maintaining the electricity cost,
06:16or reducing it,
06:17is the job of the government.
06:19Because,
06:20these are government institutions,
06:21distribution companies.
06:22Now,
06:23if you have no control over losses,
06:24of the government,
06:25if you are saying,
06:26which is the reality,
06:27that distribution companies,
06:29in the last two years,
06:30in the last one year,
06:31have lost 590 billion rupees.
06:34And,
06:35because of that,
06:36the government,
06:37at this time,
06:38is saying,
06:39that two years ago,
06:40the board of directors,
06:41in eight distribution companies,
06:42because of their incompetence,
06:43590 billion rupees were lost.
06:46So,
06:47you were the one who invested them.
06:48Right.
06:49You see,
06:50there should be accountability,
06:51there should be some ownership.
06:53If you invest so casually,
06:55and after two years,
06:56you simply say,
06:57that we will change them.
06:58So,
06:59if you don't cut the line losses,
07:00this is what the businessmen say,
07:01that you cut the line losses,
07:03you increase your collection,
07:05so that the burden is less for us.