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Last Updated on Tuesday, 30 November 1999 05:00 Tuesday, 29 June 2010 10:48
EDITORIAL : A new gas pricing mechanism is in the offing, according to a Business Recorder exclusive: the average of the considerable divergence between the local cost of extracting gas, estimated at 3 to 4 dollars per MMBTU, and imported gas, ranging from between 13 to 17 dollars per MMBTU, would determine the local price. Pakistan is expected to import ever increasing quantity of gas to meet its domestic needs as local gas fields become depleted.
The Pakistani government s perennial need for cash is well-documented in the economic history of this country - a need that has been sustained, based on each subsequent government s inability to raise the tax-to-GDP ratio, as well as its inability to curtail its burgeoning current expenditure. In the past, development surcharges on any single commodity have rarely if ever been used to develop that sector and have invariably been usurped by an inefficiently run central government.
Past precedence reveals that the easiest collections are from the oil sector as they are painlessly collected at source and there is little flexibility in terms of corruption. Or in other words, money so collected is easy to verify and the discretionary powers of tax officials, the major source of corruption in the tax collection machinery, is next to nil. Hence, there is not only a bias in favour of increasing such charges as they are easy to collect, but the government does not consider that it is accountable to the people of this country on how it chooses to spend the money so collected.
Courtesy: Business Recorder
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