WHILE it might not be justified to label the federal budget for the next financial year ‘poisonous and lethal’ as has been done by the opposition PTI because of the relief measures and pious goals it aims to achieve through various proposals, one is constrained to say devil is in the details after a cursory glance over budgetary documents and explanations provided by the Federal Board of Revenue (FBR) vis-à-vis the new taxation measures. These tax proposals make it doubtful that the Government will be able to achieve the 12% target for inflation in the coming year in the midst of apprehensions that a new wave of inflation would hit the people.
Imposition of excessive Petroleum Levy (PL is one of the major factors behind back-breaking prices of POL products in Pakistan and with this in mind it would be a cruel joke to raise the existing levy from Rs 60 a litre to Rs 80 a litre for the next year as this means the prices would go up straightly by Rs 20 a litre irrespective of upward or downward changes in the price of oil in the international market. The proposal is another confirmation of the fact that the prices of POL products are mercilessly used to squeeze maximum undue money from pockets of the common man. There have been demands for long to reverse this trend but regrettably this still remains the preferred option for all economic managers. The impact of this measure can be gauged by the fact that the Government expects to collect Rs 1,281 billion on account of PL on petroleum products during 2024-25 as compared to the revised target of Rs 960 billion during outgoing year, an increase of Rs 321 billion. Similarly, the cost of owning a house has increased manifolds due to inflation and heavy taxation but strangely enough the government has proposed more measures to push up this cost further. The new budget proposes an increase of Rs 50 on account of FED on a bag of cement and it is anybody’s guess that the end price for consumers might go up further because of lack of proper regulation and monitoring. The FBR has introduced progressive taxation rates on the sale and purchase of properties under the withholding tax regime and divided them into three categories – filers, late filers and non-filers, increasing tax rates significantly for all categories. It has also slapped FED on commercial properties and first sale of residential properties @5%. The government has hiked rates of higher income earners slabs of both salaried and non-salaried classes to fetch additional revenues of Rs.250 billion in the budget 2024-25. Traditionally, food items remained exempt from taxes but under pressure of the IMF the government is proposing to abolish exemptions and impose GST on milk and milk products, poultry feeds besides stationery items, LPG, tractors, supplies of electricity to all residential and commercial consumers in tribal areas, newsprint and books and mobile phones in the budget. The government has also imposed a10pc tax on personal computers and laptops, notebooks, whether or not incorporating multimedia kits. As poultry has become food of the common man, the decision to impose GST on poultry feed would push the prices further high and therefore needs to be re-versed. Similarly, tax on computers, laptops and stationery items is also retrogressive in nature in view of the avowed commitment of the authorities concerned to promote literacy. In this backdrop, it is hoped that instead of trying to play with the galleries, the opposition parliamentarians would analyze the budgetary proposals on merit and give their concrete input to make them acceptable. There is logic in voices demanding national consensus on economic and fiscal policies but the objective can only be achieved if the tendency of criticism for the sake of criticism is discarded and workable proposals are offered to realize the twin objectives of relief for the people and a reasonable increase in revenue collection.
