DOCUMENTATION OF ECONOMY THE ONLY OPTION TO SPUR GDP GROWTH: ICAP
July 4 - 10, 2011
The senior members of Institute of Chartered Accountant of Pakistan (ICAP), one of the most prestigious organizations, have attributed the poor documentation of the economy, absence of good governance and corruption to the low GDP growth rate in Pakistan.
While talking to PAGE during a presentation about Golden Jubilee Celebrations of ICAP the senior members of ICAP said that in fact the lack of documentation is the major reason for poor tax to GDP ratio. They feel that sincere efforts are needed to bring the informal economy into the net of documentation if the government is really serious to enhance the tax base in the country. They also pointed out that the culture of indirect taxes was another factor for poor growth rate on one hand while the indirect taxes are responsible for enhancing poverty level because the indirect taxes have to be paid by the poor.
There could be no second opinion about the existence of informal economy almost parallel to the formal one which adversely affects tax to GDP ratio yet there are some undeniable facts as well which encourage people to stay away from documentation or tax net; that is a sheer sense of mistrust between private sector and the government functionaries.
In order to encourage every small and big income to come into the tax net, serious efforts are required for image building of the government functionaries which are generally looked suspiciously for misuse of the public funds. To achieve this highly desirable goal, image building of the government functionaries and good use of revenues through transparent system is pre-requisite to restore the confidence of the taxpayers.
Although the Chartered Accountants have to play a significant role in the economic development of the country, yet they do not have the execution powers to enlarge the size of documented economy. However, documentation of the economy is the only way to strengthen flow of revenue to the exchequer.
It may be mentioned that the Institute of Chartered Accountants of Pakistan (ICAP) is holding an international conference in the last week of this month which will be attended by accountants from India, Bangladesh, Sri Lanka and other regional countries.
The international conference being held on July 26 and 27 is the part of Golden Jubilee celebrations of ICAP established 50 years ago.
Accounting is a powerful tool which has conventionally been used in optimizing the economic performance of organizations and there is no reason that the same tools cannot be used to enhance their social and environmental performance. Keeping in view the recent socioeconomic conditions of Pakistan, it is necessary to promote this trend in our country.
These views were shared by Pervez Muslim, Chairman Conference Committee ICAP, while he was addressing the Golden Jubilee Media Launch of ICAP. He added that traditionally it has been financial accountability that is the forte of accountants but now various countries are making strides in the field of social and environmental accounting.
On this occasion Zahid Bhatti, Vice President (South) ICAP, Hafiz Mohammad Yousuf Vice President (North), members of conference committee Adnan Zaman and Nadeem Yousuf were also present.
To highlight the significance of this global trend, ICAP is holding a conference on 26th and 27th July, 2011 titled "Accountants and Social Responsibility" as part of its Golden Jubilee Celebrations. Apart from the 1200 participants, the conference will feature presidents of its counterparts from different countries and various top-notch professionals from the public and private sectors. The moot will explore topics like Resource Mobilization in Developing Economies; Indirect Taxation and Fiscal Deficit; Poverty Alleviation, Accountants: Catalyst for Social Development; Green Accounting; Carbon Trading and so on. The conference will be managed by TerraBiz Group, the leading event producers of Pakistan.
Hafiz Mohammad Yousuf, who is also the Chairman of the Golden Jubilee Celebrations Committee in his address elaborated the significance of the Golden Jubilee Year of the institute. The council of the institute decided that keeping view the numerous milestones the celebrations of the 50th anniversary would be held all through the year 2100. He highlighted the initiatives and activities undertaken by the institute during the current year which included the inaugural ceremony of the golden jubilee celebrations in Islamabad; the two CFO conferences in Lahore and Karachi for the members and the students alike; and the two day international conference scheduled for July 26th and 27th. The yearlong celebration will be concluded during the concluding ceremony to be held in Lahore later this year.
Pervez Muslim said that ICAP was established under The Chartered Accountants Ordinance, 1961. Since then, it has come a long way from a very small community of registered accountants to what it is today - a professional body of over 6,000 members. Upholding integrity, inculcating professionalism, and enhancing quality have been the hallmark of the institute in the past five decades.
ICAP has been serving the society in many aspects but the most noted contributions of ICAP is that it acts as a think tank for the government by setting up the economic, corporate, financial policies and advisor to the government. In the private sector, no other private company is playing such a huge part as ICAP.
Revenue Advisory Council has 12 members out of which four are ICAP members. ICAP also renders advisory council services to the State Bank and the SECP. Furthermore, Code of Corporate Governance was developed by the State Bank of Pakistan and SECP and implemented on the recommendation of ICAP. There is also a separate institution working under the name Institute of Corporate Governance of which ICAP was one of the sponsors.
Earlier, Shoaib Ahmed, Secretary ICAP shared a presentation based on ICAP's vision and functions. He said, "As professional accountants we have a critical role in accelerating the progress of our country towards economic stability and the institute will continue to support and facilitate not only its members but also the government, the regulators and the business community in this respect." In recognition of ICAP's 50 years' services, Pakistan Post is launching honorary stamp. Meanwhile, nationwide programs are also being organized to celebrate the golden jubilee of the institute.