Increasing Taxes in Pakistan - go for the Real Estate market
In Pakistan, the word investment is usually implying "property" or Real Estate. Constant urbanisation, population growth & rising (whatsoever) purchasing power creates constant demands. Farmland has become residential & commercial. Landholders have become ultra rich. Only to pay less than their fair taxes.
While talks with IMF are ongoing to increase revenue by 1) increasing petroleum levy 2) removing sales tax exemption 3) increasing income tax rate 4) removing zero-rated tax status. The real culprits are often spared. Large land holders & property investors have hardly contributed to the exchequer.
As a proponent of development & construction, I do see merit in the construction amnesty schemes. However, it could have had progressive taxation regime i.e tax on whitening Rs 5b should be marked higher than whitening Rs 50m. Most rich lot have piled their wealth successfully by purchasing sub-urban lands only be converted into "housing society" decades later. Again, no issues with buying lands either.
Problems arise when there is disproportionate benefit to ultra-rich that a) creates inequality b) parks capital in unproductive use c) inflated land/houses prices d) comfort of whitening every decade. Had this money been deployed to create industries, businesses & test entrepreneurial stints it would have had magnanimous impact on our economy. The rich would have gotten richer but poor wouldn't have remained poor.
It's in Pakistan's and government's interest to control real estate prices by increasing duties on purchases more than rs 30-50m. One person shouldn't allowed to buy multiple expansive land at nominal interest rates. Of course there will be loop holes. But if you control the prices of posh land - say DHA Phase 8 - the reference benchmark rates act as a cap for the remaining areas.
Granted investment in real-estate on risk-adjusted basis has had much longer success rate, comfort & feel-good factor. Most of that is attributable to our inadequate policies, equity & fixed incomes booms & busts as well as perpetual currency depreciation. But before policy makers agree to revise the taxation regime - all options must be exhausted to protect the income equality. Saving middle class is imperative. Taxing real-estate is a win, win & win for consumers, economy & employees.