Budget 2025-26 | Car Prices Drop? | Unit Rs 15? | Solar Price Decrease in Pakistan | Dr Salman Shah

Summary

Former Vice Chancellor Dr. Salman Shah critiques Pakistan's economic policies, highlighting the government's failure to reduce expenses or implement meaningful reforms. He agrees with Khaqan Abbasi that the current tax and economic system is dysfunctional, contributing to Pakistan's financial struggles. Shah stresses the importance of investment-focused policies and a simplified tax system. He emphasizes that the ruling elite benefits from the status quo while the general public suffers from stagnation and unemployment. He also points out the detrimental impact of the government's heavy tax regime on economic transactions, urging for deregulation and modernization of the tax system.

Takeaways

• 😀 The current budget is a repeat of previous budgets, focused on meeting government expenses rather than addressing public needs or promoting investment.
• 😀 Pakistan's economic management system is dysfunctional, contributing to the country’s poor economic standing and low per capita income.
• 😀 The government has failed to carry out necessary reforms despite having significant power, support from the establishment, and an opportunity to make changes.
• 😀 Government expenditure has continued to increase, with no effort to consolidate ministries or reduce government size, contrary to promises made.
• 😀 Pakistan's taxation system is corrupt and ineffective, leading to lower tax collection and further economic problems.
• 😀 There has been a sharp decline in private sector investment, which is at one of the lowest points in Pakistan's history.
• 😀 Restrictions on real estate and car transactions, such as the need for FBR approval, could significantly reduce economic activity and hinder GDP growth.
• 😀 The IMF has advised the government to reduce its size, but instead, the government has continued to expand, prioritizing tax collection over growth and investment.
• 😀 A shift from a tax-oriented economy to an investment-oriented economy is needed to promote job creation and economic growth.
• 😀 Deregulation and privatization are essential for improving the economy by reducing bureaucracy’s control and fostering market-driven solutions.

Q & A

What is Dr. Salman Shah's opinion about the current budget?

Dr. Salman Shah agrees with Shah Khan Abbasi's assessment that the current budget lacks relief for the public, fails to control expenses, and is simply a repetition of previous budgets. He believes that the economic system is dysfunctional, and the government's efforts are insufficient to address the real needs of Pakistan's economy.

Why does Dr. Salman Shah think Pakistan's economic system is dysfunctional?

Dr. Salman Shah states that Pakistan's tax system and overall economic management have failed, with the country becoming one of the poorest globally. He highlights the low per capita income and stagnating development indicators as evidence of this dysfunctionality.

What does Dr. Salman Shah believe the government could have done differently?

Dr. Shah believes that the government had the power to bring genuine reforms, but instead, it increased its expenditures without reducing waste or consolidating ministries as promised. He also criticizes the government's failure to enforce the 18th Amendment effectively.

How does Dr. Salman Shah view the government's approach to taxation?

Dr. Shah criticizes the government's approach to taxation, arguing that it forces people into corruption and does not create a fair or functional tax system. He suggests that simplifying the tax structure and encouraging self-assessment would have been more effective.

What is Dr. Salman Shah's view on the state of investment in Pakistan?

Dr. Shah points out that investment in Pakistan has almost come to a halt, with the private sector unwilling to invest due to high taxes and an oppressive business environment. He believes this lack of investment is a key issue stalling economic growth.

What are Dr. Salman Shah's thoughts on the impact of the tax regime on real estate transactions?

Dr. Shah is concerned that the government's approach to regulating real estate transactions will disrupt economic activity. He believes that requiring approval from the FBR for nearly all transactions will slow down economic activity and discourage transactions.

What is Dr. Salman Shah's perspective on car prices following the budget?

Dr. Shah suggests that while the government's budget may allow for the better sale of old vehicles, the restrictions on non-filers will limit the number of people able to engage in transactions. This, he believes, will disrupt the car market and overall economic activity.

How does Dr. Salman Shah view the role of bureaucracy in Pakistan's economy?

Dr. Shah argues that the bureaucratic control over the economy needs to be eliminated. He advocates for deregulation and privatization to enable the market to function more freely, suggesting that reducing government intervention could lead to greater economic growth.

What is Dr. Salman Shah's recommendation for improving the tax system in Pakistan?

Dr. Shah recommends a simplified tax system with low tax rates and a self-assessment approach, similar to the system used during Musharraf's era. He believes this would encourage people to pay taxes voluntarily and boost the country's revenue.

How does Dr. Salman Shah suggest modernizing Pakistan's tax collection system?

Dr. Shah proposes that the tax system should be modernized through digitization, utilizing technology and artificial intelligence to make tax collection more efficient and transparent.