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Tax revenue and power crunch

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(Globalpost/GlobalPost)

Among the fallout of loadshedding is the difficulty when it comes to revenue generation, evident most obviously in how badly the FBR’s revenue graph has plummeted. The figures released by the FBR shows that during the past nine months, a shortfall amounting to Rs 575 billions has been registered.

Where an aspect of this decrease is some of the traditional loopholes in tax collection, to a large extent the doldrums that are jolting the economy are the major cause of this fallen level. The scourge of loadshedding being the economy’s nemesis, unless it is first nipped in the bud, there can neither be any improvement in economy nor would it enable the tax graph to go up.

The FBR keeps telling the public that it is working hard to broaden the tax net but it is incomprehensible that power generation, which is such a big hurdle towards that end, is not declared enemy number one. The circular debt remains a major problem, whose payment could ease the crisis at least in the short term. The caretakers could do something about that, since the crisis is intensifying by the hour.

However, in the long term, quick-fixes would turn out to be counter-productive, as they are proving at the moment and hence we would have to rely on hydro-power projects. And if there is one large reservoir that has the solution to growing water and electricity needs, it is the Kalabagh Dam now awaiting a green signal from incoming elected government.

http://www.globalpost.com/dispatch/news/asianet/130403/tax-revenue-and-power-crunch