Concern voiced over new taxation ‘proposal’

KARACHI: The proposal for doubling tax collection from business individuals and salaried person will hurt the middle and upper middle income groups.

The salaried class is already buried under heavy taxation, said Ateeq ur Rehman (economic & financial analyst), adding that depending on salaried class and organized sector for tax to GDP ratio is not a positive sign for economic growth of the country.

It has to include retail, real state and agriculture as a pressing need of the day. Heavy utility tariffs and additional taxes is not a good composition of a better economy.

Further day by day privatization is getting inevitable to get rid of liabilities and losses in major public sector of the economy.

Our financial sector cannot bear the enormous burden of payables and accrued amount incurred through losses and idleness of unprofitable entities.

The pilling up of circular debt of electricity and gas is another burden of our economy which has become one of the sources of extremely high energy / gas tariffs.

The industrial tariffs are rising rapidly and consequently the 50 percent of production expenses of an Industry is comprised of the electrical / gas cost, added Ateeq.

The huge Interest rates are not only adding to the cost of working capital but also discouraging investment in expansion capacity and have become challenge for business / industrial community.

Inflation is still too high and negative Interest rates do not justifying any easing at this point.

We continue to see a fall in our large scale manufacturing and small scale manufacturing which includes textiles, automobile, iron & steel products , electrical equipment, POL refining, pharmaceutical industry, cement industry, engineering industry, chemical, etc.

In order to achieve the targeted goals of exports by $60 billion, remittances by $32 billion and increasing the size of the local economy by $350/$400 billion, we have to go into the acquisition of economic planning depending on reducing the burden of debt and attracting FDI to the tune of $40 billions.

Copyright Business Recorder, 2023