AS if imposition of taxes worth Rs 343 billion through the finance supplementary bill was not enough, the Government has decided to hike the prices of petrol and diesel by Rs 4 a litre on the very first day of the New Year.
However, Minister for Information and Broadcasting Fawad Chaudhry has claimed that reduction of LNG price up to Rs 6 a kilogram is a New Year gift for people of Pakistan whereas Chairman Federal Board of Revenue (FBR) Dr Muhammad Ashfaq has insisted that the impact of the latest revenue measures on the general public would be just Rs 2 billion and, therefore, he saw no possibility of any increase in inflation due to mini-budget.
Reduction in LNG price is a welcome development as its usage has increased both in urban and rural areas because of shortage of natural gas during winter season.
However, it may be pointed out that the prices of LNG showed a record increase as these have been hiked from Rs 140 a kilo a few months back to Rs 230 a kilo (now) i.e.an increase of Rs 90 a kilogram and reduction of its price by six rupee per kilogram would hardly make any difference for consumers.
In fact, the gains so envisaged would be washed away by the latest upward adjustment in the price of oil despite a fall in its price in the international market.
As for the new taxation measures, one fails to understand how the people would remain unaffected when sales tax exemptions worth Rs 343 billion are being withdrawn as it is the end consumer who bears the burden of any increase in taxes and duties.
The Rs7 billion income tax measures have been taken in the shape of increasing the income tax rate on telephone calls by 50% and enhancing advance income tax on registration of cars by 100%.
A few months back, the Government took serious notice of repeated increase in the prices of locally manufactured cars but the mini budget proposes to increase federal excise duties on purchase of locally made and imported cars of 1,000cc and above categories to raise another roughly Rs25 billion in revenues as a result of which the car prices would go up further.
Again, the logic that “the imposition of 17 percent GST at import stage of raw material of the pharma sector would bring down prices of medicines in the domestic market by 15 to 20 percent because of the availability of input adjustment through Sales Tax refunds” is fundamentally flawed as our industry and businesses rarely pass on any relief to the people.
One wishes the expectations of the Information Minister regarding reduction in prices of different commodities by August 2022 do materialize but ground realities spark little or no confidence.
