Economist Khaqan Najeeb's analysis of "IMF program and Taxes"
Economist Khaqan Najeeb's analysis of "IMF program and Taxes"
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00:00Doctor, please tell us that the disease is in front of everyone and they say that earlier
00:06there used to be a deal with IMF, marriages were not broken, but at that time, obviously,
00:11due to a little naivety, there was no such idea.
00:14Now it is known that we have to give, so there are holes in it.
00:19So what more can be expected after this deal?
00:23Look, Ashfaq, the thing is that whatever 6 to 8 billion dollar program you have to decide
00:28is because you need 22 billion dollars every year.
00:31You are not ready to give 22 billion dollars without the umbrella of IMF.
00:36What does this mean?
00:37This means that multilaterals, your other institutions like commercial banks, your friendly countries,
00:44are all telling you that if you are engaged with IMF, then we believe that their stamp
00:51of approval is necessary.
00:54Let me ask you something.
01:13Am I right?
01:14Yeah, largely.
01:15You see, IMF is the doctor of the last resort.
01:24Number one, it is not defined what that program will be.
01:27If the competence of the country authorities in every field, whether it is taxation, monetary
01:32side, energy side, privatization, is good, then the program will be homegrown,
01:37the program will be based on fundamentals.
01:39Otherwise, IMF can make your pricing changes, slow down your economy,
01:44can give you a space, can give you a time,
01:49that the hard calls are made by the country.
01:52Whether it is in increasing taxation, bringing in new taxpayers,
01:57in the organization of the electricity system, in the privatization of Adars,
02:02in any field.
02:03IMF can provide you that time and space.
02:06Again, you have that time and space even today, Sadaf.
02:09You can use it wisely.
02:10One thing, Sadaf, there is a very important statement of Omniqat.
02:14He says, the time has come.
02:15The Prime Minister is also saying that those who have wealth should make sacrifices.
02:19Now, the question is that when they are asked to make a sacrifice,
02:23then a lot of problems arise.
02:26The President is saying that big landlords will have to be taxed now,
02:30leave the small farmers.
02:31But we have been saying this for years.
02:34But this does not happen.
02:36Now what will happen?
02:37That this will happen.
02:39Sadaf, these are just words that are being given to the people,
02:43on which so much tax has already been imposed.
02:46Sadaf, one thing is that there is no scope left.
02:48Earlier, we used to ask from here and there,
02:50take this program, make this project and spend this time.
02:55I think that time has passed.
02:56Now we have no scope left.
02:59Neither are we ready to give such a loan.
03:02Our own financial problems are also very deep.
03:05So, in any case, we have to work beyond the IMF.
03:10If 20-22% of the economy is agricultural,
03:14then by giving 9.5 billion rupees tax,
03:17the time cannot be cut in the agricultural income tax.
03:20If 1% of our holders are holding 20% of the land,
03:26then the President is right that they should be taxed.
03:29There can be no other option.
03:31They should do it for themselves.
03:32IMF or not.
03:33If you want to take a tax of 40% from a 5 lakh holder,
03:38if you want to take a tax of 50% from a non-salary holder,
03:43if he is earning 1 crore, then why not the real estate?
03:46But the point is that,
03:47you see what is happening at the moment.
03:49The tax that is going to be imposed on someone,
03:51in fact, the hybrid electric vehicles that are being made in the country,
03:54or even if it is the Petroleum Dealers Association,
03:57or even if it is Tajir,
03:59or even if it is the Flower Mills Association,
04:02everyone protests and does their own business.
04:04Or at least they try.
04:06The salaried class has already been squeezed so much,
04:09so the IMF micromanages everything.
04:14Can't they give a guideline on this,
04:16that in which industries you should take,
04:18not just say, but take the tax from here.
04:20So I think this largely discussion has always been with the fund.
04:24But Ashfaq, this is our internal discussion,
04:27that there should be a vertical and horizontal equity,
04:30the Sadaf tax that is being given as an employee of ARY,
04:33the same tax should be given to the people earning agricultural income,
04:36the same tax should be given to the people earning real estate profit,
04:39the same tax that I keep money in the bank, should also come from there,
04:43and should also come from retail and wholesale.
04:45This is our internal discussion for us to have.
04:48I often tell the IMF that,
04:50you know, they are like us,
04:52they have done their PhD from a university like ours,
04:54that you have to think deeply into Pakistan's context,
04:58there is no vertical or horizontal equity taxation here,
05:01how long will you run the country by relying on indirect taxation.
05:05Their logic of course is that,
05:07our country authorities have to come up with this,
05:09their logic is that,
05:10we can't make such deep changes in three years.
05:14We have to do all this work ourselves,
05:16I have always maintained that.
05:17We have to do the work ourselves,
05:19but we, like Dr. Sir, also keep telling solutions,
05:24but we don't see such solutions being implemented.
05:27Thank you so much Dr. Khakan Najeeb for being with us.