Untaxed agriculture sector enjoying subsidies

ISLAMABAD - State Bank of Pakistan (SBP) former Governor Shahid Kardar on Wednesday pointed out that agricultural sector is not being taxed in country due to the political reasons despite the fact that huge amount in term of subsidies has been given to this sector.He said this while addressing a lecture on 'Pakistan and the IMF' organised by the Pakistan Institute of Development Economics.  Dr Meekal Ahmed, Visiting Senior Fellow, PIDE and formerly Senior Advisor to Executive Director IMF delivered lecture. Shahid Kardar presided over the invited lecture. In his lecture Dr Meekal said a great deal is written and said about the IMF's interaction with Pakistan, none of it good, most of it couched in sweeping negative terms and some of it quite hostile. He held that at the same time in Pakistan who has a deep abiding commitment to economic reforms and feel frustrated by the fact that so little reforms have been undertaken think that the IMF has been insufficiently tough on Pakistan, letting Pakistan off the hook time and again rather than taking opportunity of a critical situation to push through much-needed reforms. Dr Meekal added that IMF is in cahoots with Pakistan's elite and is not willing to stare down powerful vested interests in agriculture, the stock market, the real estate sector and services which remained untaxed."Yet, despite all the programmes we have had with the IMF and the legions of technical assistance missions and fiscal experts, the tax system remains dysfunctional, discriminatory and corrupt with too many exemptions, concessions, tax arrears, non-filers and under-filers. Pakistan's tax to GDP ratio after 64 years is still amongst the lowest in the world and risks falling further," he said.Former Governor State Bank, Shahid Kardar said that in Pakistan we have no proper implementation mechanism to seriously undertake any policy reforms.He said, "We have high default rate in electricity bill payment, as private sector is defaulter of Rs 160 billion, the question rises why we not disconnecting them?. On the other hand, we have 34,000 registered electricity commercial users of which only 4,000 file tax returns. He emphasised on governance issues and lacklustre priorities of policy makers. He categorically pointed out that bureaucracy is just not willing or committed for economic reforms. While speaking on the occasion, Vice Chancellor, PIDE, Dr Rashid Amjad said that in last 20 years Pakistan had been through 15 IMF programmes with very little to show for them. In the current uncertainty the investment rate has dropped to 11 percent of GDP the lowest in the country's history.