June 6 - 12, 20


MIRZA MUNAWAR: I am fellow member of various institutions, e.g., Institute of Cost and Management Accountants of Pakistan, Institute of Corporate Secretaries of Pakistan & Pakistan Institute of Public Finance Accountants. Did law graduation (LLB) and M.A. in Punjabi Literature from the University of Punjab. I possess over 27 years of experience in industry, professional practice and teaching. I am the Chief Executive of Munawar Mirza & Company, Cost and Management Accountants, Lahore as well as Director of CFE College of Accountancy and Finance and Dean Chartered Accountancy Program. Earlier, I served many national and multinational organizations in Pakistan and abroad. I am a regular contributor of articles on professional issues in periodicals and professional magazines and have authored various books in the field of taxation and corporate laws some of those are:

1. Synopsis of Taxes in Pakistan
2. Introduction to Taxation
3. Access to Income Tax Law
4. Federal Taxes in Pakistan
5. Sales Tax Law in Pakistan
6. The Companies Ordinance, 1984
7. Corporate Laws in Pakistan
8. Introduction to Company Law
9. Mercantile Laws in Pakistan
10. Business and Industrial Laws
11. Advanced Taxation - Practice Kit

I have been serving the profession of accountancy in various capacities and held various positions in the professional bodies such as:

- Currently Member of the Board of Governors of the Pakistan Institute of Public Finance Accountants. Earlier remained President, Vice President, Secretary and Treasurer of this Institute for the years 2010, 2009, 2008 & 2007, respectively.

- Since 2005, I am Member of the National Council of Institute of Cost and Management Accountants of Pakistan.

- Earlier held the positions of the Chairman, Vice Chairman, Secretary and Member of Lahore Branch Council of ICMAP and many committees constituted by its National Council.

- Remained Technical Advisor of the Professional Accountants in Business Committee of the International Federation of Accountants (IFAC) for the last four (4) years.

- Member of PAIB Committee of South Asian Federation of Accountants (SAFA).

I ammember of various professional bodies including:

- Lahore Tax Bar Association
- Lahore District Bar Council
- Punjab Bar Council
- Pakistan Institute of Public Finance Accountants
- Institute of Corporate Secretaries of Pakistan
- Institute of Cost and Management Accountants of Pakistan


MIRZA MUNAWAR: Saving depicts a surplus of revenues over expenditures. This is possible only if a person, an enterprise or a nation is spending less as compared to its earnings and is in a position to save something after meeting its all basic necessities. Economic study of Pakistan reveals that since many years there is a continuous declining trend of domestic savings, which is primarily due to the following factors:

1. High rate of inflation, affecting all major price indices, i.e., Consumer Price Index (CPI), Wholesale Price Index (WPI) and Sensitive Price Index (SPI);

2. Continuous devaluation of Pak Rupee (Rs60.4 per $ in 2007 to Rs86.3 per $ at present) resulting in increasing the cost of all imports including raw materials which in turn increases to cost of production from such raw materials;

3. Lack of control of government and its agencies over price mechanism. Every individual is free to increase price of his commodities and services as and when desired. This tendency of arbitrary increase of prices, especially in case of basic commodities, badly affects the budgets of individuals hence tends to reduce his capacity of saving;

4. Increase in cost of education is another major element of decreased saving;

5. Mismanagement and bad governance on the part of the governments and increasing corruption result in leakage of resources and/or non-collection of revenues. This once again leads the government towards taking steps for easy collection of revenues from indirect means, e.g., increase in fuel prices, collection of income tax on cash withdrawals from banks, tax at source on utilities bills, etc. This badly affects the individual savings;

6. Lesser return on deposits and investments in government securities as compared to rate of inflation forcing the individuals to invest in non-productive commodities (such as real estate, gold, and shares). Thus, any meager saving which individuals have goes into such sectors which result in more inflation;

7. Deteriorating law and order situation which prevents a genuine investor to invest in Pakistan, so there is decrease in job opportunity coupled with scarcity of manufactured goods. This also affects the prices to be paid by their consumers leaving less to be saved;

8. Acute shortage of energy renders manufacturing and business most difficult. Industries are closed or shifted to other countries thus reducing the income opportunity of individuals;

9. Worst law and order situation, bomb blasts, hammering bad news, scandals, non-existence of true leadership coupled with worst economic situation has badly affected the health of individuals and has increased the medical bill of families, thus forcing them think about survival instead of saving.

It is a haunting fact that our national budgeting starts from expenditure (i.e., we first determine what we shall spend and then look into the resources) instead of considering what we have and in the light of available resources what should be spent. This tendency has witnessed every year in the form of increased deficit budgeting.

It also leads towards borrowing even at the cost of the national interest. Single information about the "public debts" shall be enough to gauge the real picture. Public debts in September 2010 were Rs9,473 billion (Rs4,956 domestic currency debts and Rs4,517 foreign currency debts) as compared to Rs4,801 billions ( Rs2,600 domestic currency debts & Rs2,201 foreign currency debts) in year 2007. Cost of these borrowings is ultimately shifted towards the public, which affects their spending and saving capacity


MIRZA MUNAWAR: Poor saving scenario has engraved long lasting impressions on the economy of Pakistan. It is a common observation that saving of individuals is ultimately shifted, through financial institutions, towards industries which create more production activities, more national production and more revenues to individuals and the government. Lack of saving affects adversely which is evident from our economy. If somebody has some savings, he wants to keep it in his hands or invest the same in non-productive sectors. Industrialists have either shifted their investments towards basic commodities, e.g., wheat, sugar, fruits, vegetables, poultry, etc., (thus bagging short term profits and minting money and indirectly increasing inflation) or are shifting their industries to middle east, Bangladesh, or somewhere else instead of making investment in industries in Pakistan.


MIRZA MUNAWAR: In order to increase savings to GDP rate a complete package of various economical, financial, fiscal and statutory measures is needed. This requires a complete political will coupled with strict financial discipline backed with real rational decisions made in the light national interest considering the need of the day.


MIRZA MUNAWAR: There is a long list of measures to be taken by the government if increase in domestic savings is desired, some of those are:

1. There is a dire need to give a second thought to our financial philosophy and budgeting methodology. The government should realistically measure its resources and then plan for spending. The concept of "zero-based budgeting" should be adopted. It should give away all unnecessary allocations. Budget should be prepared only on "need basis" and not on "historical basis".

Lavish spending of public sector in the months of April, May, and June every year is eye-opening evidence that there was actually no need of these allocations. In order to avoid their surrendering, the government departments brutally spend the public funds in last quarter of the fiscal year.

2. Financial discipline on part of the government is must. This nation cannot afford the type of governance being exercised at present. Long list of ministers, advisors, parliamentary secretaries, etc., in federal and provincial governments should be reconsidered and decided rationally.

3. Borrowings should be minimized if could not be eliminated. It will reduce the debt-servicing cost and ease the situation to some extent.

4. Bad governance and corruption in public sector is needed to be checked and blocked. It will increase the government revenues and reduce its spending thus bridging the deficit gap.

5. Measures should be taken to control the inflation.

6. Price of basic commodities must be kept in control and within the reach of a common person. Likewise, there is a need to resolve the energy crisis otherwise closure of industries will continue. Revival of industries is important to provide job opportunities to people and increase in their earning capacity.

7. The devaluation of rupee should be taken seriously. Its stability may resolve some of the serious problems.

8. There should be tax incentives on savings and investment/spending on education and medical. These measures were introduced by late Dr. Mahboob-ul-Haq and were used to be available under the Income Tax Ordinance, 1979.

It is important to note that without political wisdom, financial wisdom cannot be practiced and without financial wisdom integrity, respect and independence of a country cannot be expected.