KARACHI: This budget like the previous ones is also dictated by the International Monetary Fund (IMF) and it would do nothing for the betterment of the economy, said Pasban Democratic Party (PDP) General Secretary Eng Iqbal Hashmi here Friday.
Hashmi said the government intends to go for the digitalization of the economy. Though, this will help in raising the tax revenues, but it will also increase the non-developmental expenditure. Besides, this will have to be a phased process.
On the other hand, the government aims to increase the tax-to-GDP ratio by almost 45% over three years. With high current interest rates implying minimum business investments and low consumer spending, increasing the tax-to-GDP ratio simply means more tax burden on the salaried class. He said if progressive tax system is adopted with fairly bringing all parties into the tax net then nothing wrong in that.
However, noted economist and PDP economic think tank leader Irfan Sayed said that the logic of the government is to bring non tax filers into the tax net which will raise tax collection. According to independent estimates, the parallel economy of Pakistan is larger than the documented economy. He said this budget will do nothing to pull the economy out of the cost-push inflation cycle. This is merely an IMF-dictated budget that sends a wrong message to the investors about the government’s lack of will to give a sustainable economic package.
He said the tax revenue target of Rs13 trillion is around 40% above than the target of last year. This makes it impossible to achieve since no significant structural changes have been announced in the taxation mechanism. He said they are bringing retailers into the tax net by force, as compared to voluntary participation last year.
He said the budget does nothing to bring agriculture and real estate sectors into the tax net. Therefore, the existing taxpayers will be further squeezed. It also provides no incentives to the manufacturing sector. In fact, the petroleum levy has been increased which would further increase price hike and poverty.
The experts said that to support job creation and poverty reduction our only hope is the agricultural sector that can bring stability in food security by ending dependence on imported food stuffs, especially edible oils.
They said important energy projects like the Pak-Iran Gas Pipeline project are neglected in the budget, which shows that a nation entangled in a debt trap cannot even plan for its own survival.
Copyright Business Recorder, 2024
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