Government should introduce tax and collateral reforms to bring dead capital worth tens of billions to life which can revolutionise economy in a short span, a business leader said on Friday.
Documentation of the economy is prerequisite to national development while undocumented economy has kept masses and business community from growth and prosperity, said President Pakistan Businessmen and Intellectuals Forum (PBIF) and former provincial minister Mian Zahid Hussain.
Speaking to the business community, he said that government should take all stakeholders in confidence to document economy and underground economy, reported to be 60 percent, is expanding at a high rate.
Mian Zahid Hussain said that tax exempted sectors and tax cheats are promoting black economy which is pushing country on the path of economic suicide. Undocumented businesses face problems like loans for expansion, proper dispute resolution and legal protection, he said, adding that the amount of dead capital in the world has been estimated at ten trillion dollars.
He said that there is no dearth of talent in Pakistan but lack of trust between taxpayers and tax collectors has blocked development which result in revenue collection of less than three trillion rupees per annum against potential of five trillion. Moreover, he said, tax gap stands at Rs 600 billion while Rs 250 billion lost due to corrupt practices.
Mian Zahid, who is also President of All Karachi Industrial Alliance, said that regulatory improvements will unleash potential of many SMEs settling problems like low revenue, unemployment and deteriorating civic facilities. He said that revolutions in the Arab world were result of undocumented economies which increased frustration in the masses.
