World Bank projects a 9% growth in Tax-to-GDP in Pakistan
The World Bank has projected a 9% growth in Tax-to-GDP in Pakistan, emphasizing
the necessity for the country to tackle pressing economic issues and implement
reforms for sustainable development. In a recent report, the World Bank
conducted a thorough analysis of Pakistan's economy, highlighting concerns such
as fiscal deficits, escalating debt, and insufficient investment in critical
sectors like child welfare, environmental conservation, and human resources.
World Bank Vice President Martin Reiser, in a statement on
Tuesday, underscored the importance of addressing citizens' concerns about tax
revenues being used for their welfare. The report suggests the potential for a
substantial nine percent increase in tax-to-GDP, allowing Pakistan to raise tax
revenue from Rs 9415 billion to Rs 1800 billion.
World
Bank concerned over obstacles in privatization of Pakistan’s State Owned
Entities (SOEs)
The urgency of economic reforms was stressed in the report,
posing a significant challenge for the government post-elections. With federal
and provincial elections approaching, Pakistan faces a crucial juncture where
decisions made will shape its future trajectory. Economic indicators such as a
22-year high fiscal deficit of 7.9% and a record-high debt of 78% were
identified as areas needing immediate attention. Issues in the power sector's
credit and insufficient tax revenue from the agricultural sector, contributing
23% to the GDP, were also highlighted.
Moreover, the report shed light on educational challenges,
revealing that over 40% of children under five suffer from stunting, and more
than 20 million children are out of school. The public sector was criticized as
ineffective, with policy decisions often influenced by personal interests.
World
Bank urges Pakistan to implement real estate sector taxation
Regarding the Special Economic Zone (SEZ) SIFC (Special
Economic Zone for Foreign Companies), Vice President Reiser expressed support,
stating that privatization alone would not suffice. Success in attracting
long-term foreign investment through SIFC was deemed crucial, with the World
Bank noting Pakistan's potential for 7 to 8 percent annual economic growth.
As Pakistan approaches critical decisions, the World Bank's
insights underscore the need for comprehensive reforms to address economic
challenges and capitalize on opportunities for sustainable growth. The
post-election period in the coming months will be pivotal in determining the
country's path forward.
Source: Samaa TV