950827

Agri tax

could retire

national

debt: Mahbub

NASIR SIDDIQUI

KARACHI: Lamenting that the agriculture sector, which generates around 15 percent of the national income, pays virtually no taxes, Dr. Mahbub-ul-Haq said here on Sunday that the government could discharge the national and domestic debt by fully taxing the landowners' income. Around Rs. 100 billion accrues annually as agricultural income, he added.

Speaking as chief guest at a dinner hosted by Qaiser Ahmed Sheikh, former president of Karachi Chamber of Commerce and Industry, eminent economist and Special Advisor to UNDP, Dr. Mahbub-ul-Haq that in the abolition of the quota system lies the solution of Karachi's problem which is shattering the country's economy.

Dr. Mahbub-ul-Haq said that the people of Karachi were facing unemployment besides accute shortages of basic facilities such non-availability of drinking water, electricity and health services.

He said that the government cannot afford to neglect over 12 million people for long. Without providing job opportunities and the basic necessities, the problems of Karachi cannot be solved on a permanent basis.

He said it was high time that government should accepted the political strength of the people of Karachi and gave them their due rights. The imposition of the quota system was creating a hurdle for the competent and eligible candidates from Karachi in matters of government employment and, sooner or later, the government will have to abolish the quota system.

Dr. Haq was of the view that two governors, one for the urban and the other for Rural areas, need to be appointed here to remove the doubts arising in the minds of people living in the cities and villages. He said that rulers who belong to the rural areas cannot understand the gravity of urban problems.

He said that the majority of the private sector of the country hails from Karachi and yet the problems of Karachi are being ignored on one pretext or the other. He said the government should hold local bodies election to give the Karachiites the opportunity to manage the affairs of their city.

He was of the view that the federal government should look after the development side of Karachi, including the provision of basic amenities.

He said that the concept that about 70 percent of the Pakistani population lives in the rural areas is wrong. According to studies carried out by various international organizations, over 50 percent now live in the cities and by the year 2000 the urban population would comprise over 70 percent of the total population of Pakistan.

About the government's and businessmen's relations he said the government should take into confidence the business community while making rules and regulations meant for collecting taxes.

He said in Pakistan, the private sector does not have full trust in the government while on the other hand government feels that it can unilaterally enforce the laws on the business community.

He said that when he was the finance minister he made the disastrous mistake of ignoring the industrialists and businessmen by not consulting them while preparing the budget. He said the same mistake were being committed by the present government.

About defence spending, he said that Pakistan and India spent over 25 billion dollars over the previous year for defence purposes. He proposed that the government should cut the defence budget by atleast five percent. By doing so, each and every citizen of Pakistan will have access to clean drinking water, sewerage system and health facilities. Unemployment, which is posing a great threat to the country, would also be eliminated.

Dr. Haq said corruption in the country has gone alarmingly high.

He said the prevailing taxation system has flopped as it is unable to generate adequate funds for the state.

The taxation system needs to be changed completely. Businessmen should be consulted while making tax reform as they are the ones who really pay the taxes. The tax base should also be widened with a view to collecting a fair amount of money.

Earlier Qaiser Ahmed Sheikh and S.M. Muneer, President Federation of Pakistan Chambers of Commerce and Industry welcomed the chief guest.