‘Too many’ indirect taxes in budget will fuel poverty: NBG

KARACHI Chairman of National Business Group Pakistan, Mian Zahid Hussain has said that some conditions of the International Monetary Fund (IMF) have yet to be fulfilled in the recent budget.

However, most of the budget proposals are in accordance with the instructions of the IMF, he said. He said that honouring commitments with the IMF will help Pakistan secure new loans to keep the country afloat.

Mian Zahid Hussain said allocating 1400 billion rupees for developmental projects in these difficult circumstances is a miracle.

He said that electricity could be made cheaper by Rs10 per unit for the industrial sector by a Rs200 billion cut in development projects. The affordable electricity will increase exports by five billion dollars and also increase employment and provide relief to people, but it seems difficult at this juncture.

He said that last year, 950 billion rupees were earmarked for development projects, of which only 379 billion rupees could be spent till May.

The budget is too focused on indirect taxes, which will increase poverty while reducing government expenditure should be addressed.

There has yet to be a concrete plan to eliminate the losses of 1200 billion rupees per year from the power sector. Besides, the privatisation of 80 government institutions, which incur losses of 1200 billion rupees annually, must be done immediately.

In both terms, 2400 billion rupees can be saved annually, which makes it possible to save seven and a half billion dollars in government expenses.

He said that in the total budget of 18 thousand billion rupees, a deficit of 9 thousand billion rupees has been shown, which half of the total budget is. This deficit will be covered by taking more loans from various sources.

Nine thousand billion rupees interest will have to be paid on government loans this year and 10 thousand billion rupees next year. To avoid this situation, there is no alternative but privatization and an increased tax base.

Mian Zahid Hussain said that the industries of former Fata, Pata and other parts of the country are being given incentives of more than 200 billion rupees. At the same time, there are several incentives in addition to this, violating the promises made to the IMF.

Copyright Business Recorder, 2024