‘We’re Stuck In a Debt Trap’ Due to Tax Thefts, Corruption: PM Khan

PKONWEB — ‘We’re stuck in a debt trap’ due to tax thefts and corruption said Prime Minister Imran Khan in an address to the nation on Friday and urged citizens to declare their assets under the government’s tax amnesty scheme before the June 30 deadline.

“We are stuck in a debt trap,” he told viewers. “Why are we here? Because of corruption and theft of taxes. You don’t need to worry about corruption any longer, because we will not let it go. The problem now is tax theft. To end tax theft, I need your help,” he said.

“Until the people do not resolve, along with the government, to extricate itself from these loans, they will not be able to get out of [the debt trap].”

“The Federal Board of Revenue has all the data. If you go to the FBR website, you will find out what data we possess. I don’t want difficulties for you [in the future], that’s why I want you to take advantage of [the amnesty scheme],” he said.

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“Next year, we need to collect Rs5.5 trillion in revenue. In my view, if the people are resolved, we can gather more than Rs8.5tr every year. Our problems would be solved. We can be free, we can stand on our own two feet, get our people out of poverty. We can brighten our children’s’ future. But for this, I need your help.”

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The country faces economic crisis and fiscal problems due to a decade of borrowings and mismanagement including inability to adequately recover taxes, broaden the tax base, increase export and reduce imports, etc.

The IMF, World Bank and independent economists say the tax net needs to be broadened as one of the starters.

According to reports, current account deficit has dwindled down significantly– it has has come down to $9.6 billion in July thru March 2019 which was $13.6 billion during the same period last year. Also, Rupee devaluation is being closely watched, while remittances from overseas Pakistanis– critical for balance of payment have increased by 10pct over 11 months.

Still, on the long run, tax recovery more than tax increase, and broadening tax base are key recommendations of international lending institutions and independent economists.

The FBR on Friday announced to make the ‘treasure trove’ of 53 million persons public as part of its ongoing efforts to capture real incomes of people.

The government wants to utilize the information to enhance tax base from less than two million to four million by the end of fiscal year 2019-20.

Earlier, the government had said it has information of about 152,000 bank accounts (held by Pakistanis abroad) from the Organization for Economic Cooperation and Development (OECD).