Heavy taxes burdening, sinking the industrial sector: PEW
ISLAMABAD: The Pakistan Economy Watch (PEW) on Tuesday said the industrial sector is going down due to heavy tax burden which is blocking national development, revenue and employment.
Government continues to announce packages for the industry but avoid balancing the tax regime which is tilted towards non-productive sectors, it said.
President PEW Dr Murtaza Mughal said that the share of the industrial sector in GDP is 17 percent but it is made to pay taxes up to 73 percent while the combined share of trade and transport in the GDP is also 17 percent but it is paying only 1.2 percent tax.
The share of agriculture in GDP is 21 percent but the tax collected from this sector is mere one percent due to political reasons, he said, adding that stock market capitalisation is almost 28 to 30 percent of the GDP but this sector enjoys tax the burden of 0.03 percent which is unjustified, he said.
Dr Murtaza Mughal said that the government can easily collect up to Rs500 billion tax from wealthy brokers but it is being avoided since long for obvious reasons.
The volume of trade activity in the country is double than the exports but the authorities are avoiding to bring this sector in tax net knowing that traders also sell undocumented and smuggled items.
Due to rampant smuggling and under-invoicing local industry is compelled to show reduced production to remain in the business while professionals like chartered accountants, lawyers and doctors etc. are enjoying undue tax relaxations.
Other countries in the region take strong exception of smuggling and the traders selling smuggled goods are taken to task while destroying smuggled goods but this has never happened in Pakistan the way it should be, he said.