The tax-heavy budget for the upcoming fiscal year, approved by Parliament on Friday, will make life more difficult for ordinary Pakistanis and deepen the trust deficit between the rulers and the ruled as it imposes an array of additional taxes. which will directly affect lower prices. For middle income households.
The government has sought to finance its rising spending and secure a new, bigger bailout deal from the IMF, to meet its ambitious tax revenue target of 13tr, up more than 40 percent. Additional taxes of 1.7 trillion rupees have been removed.
Every official from the prime minister down has tried to use the budget to offer hope for a major economic turnaround in the next few years, but questions have already been raised about the integrity of its goals and the measures it contains. have been. The last-minute changes to the Finance Bill, which imposed new tax measures worth Rs 200 billion in addition to the Rs 1.5 trillion in the original bill just before The lack of Parliament’s approval indicates the government’s lack of confidence in its targets.
Many economists believe that the government will not be able to achieve the tax collection target. The budget has increased direct tax collection by 48% without expanding the existing narrow tax base.
Moreover, it leaves out those who do not come into the tax net by preserving the category of so-called ‘non-filers’, a term coined by Ishaq Dar years ago to exclude tax evaders including traders, realtors, property developers, etc. can be kept Scope of Income Tax. Similarly, he says, estimates of a 35 percent increase in indirect taxes next year are overstated given the current economic slowdown and declining purchasing power of the majority.
The finance minister has repeatedly said that the current budget aims to reduce the budget deficit and increase the tax-to-GDP ratio from the current 9.5% to 13% in the next three years. Budget details don’t match rhetoric. The measures introduced are contrary to the promises of the Prime Minister and Finance Minister.
Although some reforms such as the withdrawal of tax exemptions for certain lobbies such as exporters, the budget falls far short of encouraging confidence in the government’s ability to implement structural changes, especially when it comes to its wasteful spending. When it comes to reducing Undertaxed and untaxed sectors, including retail, agriculture and real estate, which have more political influence, are in the net.
Basically, the budget perpetuates the past, and corrects economic strategy, and policies here and there, which hardly yield any meaningful results. By burdening the middle class with more and more taxes and levies, without cutting back on spending, the government is only ensuring that the gap between itself and the people never closes.