The country’s economy continues to demonstrate mixed positive and negative trends with a long -term approach, as many problems cannot be solved effectively through basic structural reforms.
On the positive side, the Securities Exchange Commission of Pakistan in January registered a record number of 3,442 companies in diverse sectors in the same month, reflecting a 39 % increase over the monthly average of the previous year. And it is also noteworthy that 652 companies were registered in the fields of information technology and e -commerce.
There was a significant progress in the outdated reform of collecting agricultural income tax with the production of equal income. The Sindh Assembly unanimously approved the Agricultural Income Tax Bill 2025 on February 3. All four provinces have approved the required income tax law through the International Monetary Fund.
The new law of Sindh suggests that the annual agricultural income will be exempt from the tax of up to Rs 0.6 million, while the maximum tax rate for income more than 5.6 million annually will be 45pc.
Significant progress is being made in relation to agriculture tax and better exports, though many issues still demand basic structural reforms.
A progressive super tax has also been introduced, which has no super tax on annual agricultural income up to 1550m and a maximum 10pc super tax, which applies to more than 500 meters of income annually.
In the external sector, trade goods exports recorded a healthy growth of close to $ 3 billion, but imports increased to more than 5.2bn in the second month. The trade deficit increased by 18pC in January compared to the same month of the same year.
Although increasing export revenue is an important issue in handling the threat of the external sector, the European Union’s Special Representative on Human Rights, Olavs, has warned Pakistan to appreciate its GSP+ status. Don’t take Since 2014, Pakistan has gained priority access to the European Union market in the form of tariff exemption and reduction in its exports.
In exchange for this priority, Pakistan has made several promises, including the protection of human and labor rights and ensuring good governance among others. Mr Skig’s visit to Pakistan was with the amendment of the prevention of the Electronic Crimes Act.
Although increasing export income is an important issue in handling the risk of the external sector, Olif Scag has warned Pakistan not to appreciate the status of GSP+.
Analyst Don Caution, “Where international trade agreements are concerned, Islamabad cannot be expected to violate their promises to foreign partners.” History now shows dictatorship that now Pakistan has a tendency to create and maintain a victim of economic stagnation.
We can remember what happened after General Ayub’s development decade. It is worth noting here that on February 4, military officials attending a Corps Commander Conference have called for “people -based socio -economic development” to counter the “external rhetoric of people excluding people in Balochistan” The steps “emphasized the need to accelerate.
To refer to American scholar Tim Wu, the curse of the ‘Curse: The Anti -Trust’, the author of the new Golded Edge, will be like the US president’s policy focus on the command economy. “Just call it command capitalism,” he added.
Command capitalism, which they identify, has many major drawbacks. One, when the success of the business means to seek the right of the government, for example, to produce good products, to eliminate the privileges for innovation and quality. Companies that rely on the government’s preferential behavior, such as the Boeing or aerospace industry, is usually inclined towards stagnation.
He noted that it seems that the success of Trump’s economy will be especially dependent on the good side of the president.
“In Pakistan, the process of bringing basic structural changes in the economy has not begun,” said Rashid Amjad, a professor of economics of Pakistan’s Lahore School of Economics. So far, we are just scratching the level.
Business recorder analysts say tax rates are the highest in the world, while the country is the lowest in providing basic services. In the tax year 2024, he noted that despite the capacity of 15 million filers, 5.9M companies (mainly individuals) submitted tax statements, which is less than 6.3m in 2023. Taxpayers get little money in exchange for their contribution, making theft a clear choice.
Analysts added that in the economies that impose more tax rates, citizens get quality social services such as health care, education, better environment and security. In such countries, the tax proportion of GDP is more than 30pC.
Although the federal tax revenue has improved over the past year, the targeting of the target between July and January this fiscal has reached 468bn, which is also attributed to the decline in inflation.
Highlighting “tax change reform” plans, India has announced a reduction in personal income tax rates to increase the power of middle -class spending. Finance Minister Nirmala Sitharman said she was trying to increase private investment to strengthen development. “This step of Narendra Modi’s government reflects the fact that it is fully aware of the real power of India, which is his workforce,” says Syed Shabbir Zaidi.
Dawn, The Business and Finance Weekly, published on February 10, 2025
