ACCA proposes budget measures for tax year 2023-24 to address Pakistan's economic challenges

     

ACCA (the Association of Chartered Certified Accountants) has unveiled its budget proposals for the fiscal year 2023-24, highlighting the need for significant shifts in Pakistan's economic policies to tackle pressing challenges. The proposals aim to address issues such as population growth, climate change, agricultural disincentives, and food security concerns.

ACCA emphasises that to keep policies and their implementation consistent, the government, political parties, and business groups should sign a ‘charter of the economy’ for the next 10-15 years. This long-term commitment will provide stability and foster sustainable economic growth.

The budget proposals suggest a multi-faceted approach to improving the balance of payments, reducing imports, boosting local consumption, lowering inflation, and increasing exports. ACCA underscores the importance of consistent economic policies, leveraging indigenous resources and talent, and embracing a new economic model.

In line with these objectives, ACCA recommends sustainable reduction of non-essential imports and identifying import substitutes to lower the import bill. Efforts to promote eco-friendly energy sources, implement daylight savings, and reduce business hours and working days can help decrease reliance on oil and gas imports.

To enhance exports, ACCA emphasises the need to focus on services that leverage Pakistan's abundant raw materials and skilled youth. Shifting the tax burden to higher-income individuals and subsidising the cost of living for middle and lower-income segments are proposed to ensure equitable taxation policies.

ACCA calls for significant strides in the documentation of the economy to expand the taxpayer base. Leveraging technologies such as Artificial Intelligence and data analytics, the global body recommends identifying individuals living beyond their declared means and businesses making misdeclarations to bring them into the tax net.

Structural reforms, including reduced tax rates and simplified compliance processes, can make tax evasion less attractive and improve the efficiency of the taxation system. ACCA proposes minimal tax rates for large agricultural landowners, with generated revenue used to subsidise essential farming needs for small farmers.

To facilitate economic recovery, ACCA suggests incentivising local industry, manufacturing, and mining while revising costly agreements in the energy sector. Investment in green energy projects, encouraging the use of domestic products, and promoting entrepreneurship through the banking sector are also highlighted as key strategies.ACCA underscores the growth potential of Pakistan's IT/ITeS sector and calls for favorable policies, tax rebates, and investment in high-skill training to unleash its full potential. ACCA also recommends expanding the tax net by bringing professionals such as doctors, accountants, engineers, lawyers, and architects into the tax system.

Furthermore, ACCA proposes the establishment of a venture capital fund to support Pakistani start-ups, subsidies for solar panels, and prioritisation of the livestock sector in the upcoming budget.

ACCA's Global Tenets of Taxation serve as a guiding framework to establish public trust and an effective taxation system. The accountancy body emphasises the importance of openness, transparency, simplicity, and certainty in tax legislation and operations.ACCA believes that by implementing these budget proposals, Pakistan can pave the way for sustainable economic growth, address unemployment challenges, and position itself as a regional powerhouse.