Islamabad: The Pakistan Institute of Development Economics (PIDE) has launched an ambitious reform strategy, ISLAAH: Immediate Reform Agenda – HPG and others, to propel Pakistan towards economic stability and growth in the face of the coming financial crisis. Embracing the ideals of review, reform, and revitalization, this initiative responds to Pakistan’s urgent need for external financing of over $120 billion over the next five years, as highlighted in the latest HPG report. The PIDE strategy is a call for sustained reforms to ensure economic growth and prosperity, beyond the narrow interests that often dominate the reform discourse in Pakistan.
WC PIDE, Dr. Nadeem ul Haq, said that a comprehensive approach is needed to solve Pakistan’s economic woes.
The Pakistan Institute of Development Economics (PIDE) has outlined an agenda to address key areas such as regulatory modernization, tax reform, market liberalization, energy sector efficiency, and the growth of the agricultural and banking sectors. A key part of this strategy is implementing a ‘Regulatory Guillotine’ to remove burdensome regulations that hinder business growth and innovation.
Furthermore, PIDE VC said that the agenda includes several innovative reforms designed to rejuvenate Pakistan’s economic situation. These include debt restructuring and strengthening cooperation with HPG, tax reform for a more favorable environment, and the strategic opening of the economy to prioritize exports and modernize import regulations.
In addition, focus on the inefficiencies of the energy sector, improvement of the agriculture and banking sectors, and the development of real estate and the capital market to encourage investment and deepen participation in the capital market. The expected impact of these reforms is significant, promising to catalyze investment, create jobs, and facilitate higher GDP growth.
Marking the historic event, Dr. Ahmad Waqar Qasim, Dr. Afia Malik, and Dr. Mahmood Khalid, Senior Research Economist of PIDE, also participated in the first research activity of PIDE. They announced that PIDE’s groundbreaking economic reform initiative aims to streamline governance by unburdening 122 regulatory agencies operating under the control of the Federal Government, which currently accounts for more than 50% of GDP.
As we seek economic efficiency, we need to deregulate the permit system, because permits not only waste valuable time and resources but also result in significant direct and missed document costs.
To achieve this, we must stop the red tape for permits and papers, thereby overcoming the ‘Permissionistan’ syndrome, and prefer clear rules, digitization, and market liberalization. It is clear that the modest approach, inspired by the successful reforms of 1991 in India, is not enough. Instead, we support the implementation of the regulatory guillotine, a proven strategy adopted by countries such as Hungary, Mexico, South Korea, and the UAE, among others.
Further, Nadeem ul Haq said that amid the need for tax simplification and policy clarity, this budget season calls for immediate attention to simplify taxes neutrally and ensure stability for a decade. budget cycle. The negative effects of tax uncertainty and instability cannot be overstated, as shown in the PIDE report of the Commerce Province, because it has stifled investment, hindered solid growth, and hampered companies and listings.
He is in favor of a uniform tax rate across all sources of income, along with reforming the income tax system, bringing forward and correcting the loss of agricultural income, and eliminating the presumptive tax system and turnover tax. We also call for uniformity in taxation for AOPs, sole proprietors, and corporations, along with reforming company dividend income and asset sales tax. It is also important to move from withholding tax to an income tax mechanism. Harmonizing the sales tax system on goods and services, speeding up the implementation of POS through outsourcing in six months, and transitioning to a VAT system with flat rates are mandatory steps. In addition, excise duties for health and environmentally damaging products such as tobacco and alcohol should be increased to improve social welfare and sustainability.
