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LONDON: Reforms to Pakistan's revenue collection have helped government tax receipts to grow 20-22 per cent annually despite lower tax rates, Shaukat Aziz, the prime minister, said recently.
In an interview in London, Mr Aziz depicted the increases as part of a generally improving economic picture in a country for which growth last year at 8.4 per cent was faster than anywhere else in Asia except for China. Growth in coming years should slow slightly from those levels, he said, influenced in part by a rise in interest rates aimed at curbing inflation.
An economic survey taken every four years showed, he said, that reforms were beginning to eat into poverty. some 25.4 per cent of the populoation was living below the poverty line last year, compared with 32.1 per cent in 2001. Per capita income had increased from $736 a year to about $800.
Mr Aziz, a former senior executive with Citibank, was appointed six years ago by Pervez Musharraf, Pakistan's military ruler, first as finance minister and then as prime minister.
Tax revenues in Pakistan have been notoriously low as a percentage of GDP. In the last six months of last year, according to official Pakistani figures, the tax take was running at an annualised rate of 13.4 per cent. Growth had been helped by a switch to a self-assessment system in the last year, with occasional audits, coupled with lower tax rates, the minister said. At the current rate of growth, tax revenues would double every five or six years.
Mr Aziz said the country was seeking security in energy through increased efforts to exploit its own energy resources, boosting generation capacity in the thermal, hydro and nuclear areas, and through planned gas pipelines from Turkmenistan through Afghanistan and from Iran, both of which could also help supply India. . A Pakistani delegation was visiting Tehran soon to discuss the issue, he said.
He said deregulation was continuing, including in the telecommunications sector.
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