A program of deep reforms was proposed | Express Tribune

ISLAMABAD:

The Pakistan Institute of Development Economics (PIDE) on Saturday inaugurated the Economy Festival 2024, which aims to promote research for social transformation and progress.

PIDE, in collaboration with Research on Transformation and Social Progress (RASTA) program and Pakistan Society of Development Economists (PSDE), inaugurated the third Economy Festival – EconFest at Gandhara Civic Club in Fatima Jinnah Park on Saturday.

Former Deputy Chairman of the Planning Commission and Vice-Chancellor of PIDE, Dr. Nadeemul Haque, in his opening remarks, said that PIDE was proud to present a program of profound reforms aimed at transforming the economic landscape of Pakistan.

“Our goal is to dismantle outdated colonial institutions that have long fostered suspicion of markets, imposed restrictive measures such as DC rates, and hampered technological progress and the development of local research,” he said.

Haque said Pakistan was at a crossroads, grappling with government influence exceeding 64% of the economy, political uncertainty, over-regulation and a fixation on tax-to-GDP ratios that stifled investment and innovation. “Our economy is catching its breath and it is imperative that we enable people to invest and grow, supporting a society built on trust and opportunity,” he added.

He cited the key areas of the reform agenda which included energy, education, urban development, state-owned enterprises (SOEs), Federal Board of Revenue (FBR) and health. “We emphasize decentralization, professionalism and the use of technology and research to improve management. To increase productivity, over-confidence in performance-free work and the lack of results-based management must be addressed.

He advocated corporatization and privatization to break the dominance of stunted Seth Owned Companies (SSCs) and a stunted stock market, adding that the stock market should be leveraged for privatization, promoting growth beyond SSCs and providing clear investment opportunities through simplified taxes, digitization of processes and stable politician for at least a decade.

PIDE Pro Vice-Chancellor Dr. Durre Nayab emphasized the need for a comprehensive approach to Pakistan’s economic challenges. She said the PIDE program focused on key areas including regulatory modernization, tax reform, market liberalization, energy sector efficiency and improvements in agriculture and banking.

A noteworthy element of the strategy was the “Regulatory Guillotine”, which aims to eliminate burdensome regulations that hinder business development and innovation, she said, adding that the reforms also require debt restructuring, intensified cooperation with the IMF, comprehensive tax reforms and strategic economic openings to prioritize exports and modernize import rules. PIDE Chief Policy Officer Dr. Faheem Jahangir said that in the field of tax and administrative reforms, PIDE called for tax simplification and policy certainty, streamlining taxes in a revenue-neutral manner and ensuring stability for a decade.

He added that this includes implementing a single tax rate for all sources of income, eliminating presumptive tax regimes and switching to advance income tax mechanisms. He said the plan also highlighted the need for a unified sales tax system, increased excise taxes on harmful products, and automation of tax administration to reduce human interactions and increase efficiency.

He further said that PIDE advocates pro-export trade policies by facilitating company formation and stock exchange listing processes and addressing the over-regulation of Pakistani markets to create an environment conducive to investment and growth. Former FBR chairman Syed Shabbar Zaidi addressed misconceptions about taxes in Pakistan, highlighting that 54% of tax revenues were allocated to provinces, which often ran fiscal surpluses.

He questioned the accountability of provincial spending, noting that funds were often spent on luxuries rather than necessary projects. He said a significant portion of federal taxes go to debt service, and provinces also collect their own taxes.

For political reasons, the government avoids collecting taxes, especially on real estate. Zaidi compared Pakistan’s low property taxes with higher rates in Indian cities such as Pune, pointing out the disparity. Non-taxpayers often question their tax refunds.