Comment
Zubair Qureshi
The federal government against speculations of a heavily taxed budget—as economy is adversely affected by COVID-19 and all indicators showing a downward trend—had a face-saving on Friday by presenting a balanced tax-free Rs7.13 trillion budget for the fiscal year 2020-2021.
Federal Minister Hammad Azhar won appreciation of his colleagues as well as independent economic experts and critics by keeping modest targets and
announcing incentives for investors and entrepreneurs.
Some salient features of the fiscal document include tax target was kept at Rs4.95 trillion for next fiscal year while defence allocations amounted to around Rs1.3 trillion while development programme’s allocations are at Rs650 billion to support growth prospects.
A mixed reaction to the budget by experts shows the government secured preliminary round in budget making and kept in mind the problems of the common man, the salaried class and the daily wagers while computing the estimates, opportunities and challenges lying ahead.
Jobs and employment opportunities have been the biggest concern of the economists while shaping the outline of the federal budget for the last few months, a senior official of the Ministry of Finance confided to Pakistan Observer while sharing the budgetary process.
However another analyst termed the budget ignoring the ground realities. At a time they say there re no new taxes but in the same breath they have raised Rs1,000 billion taxes, said he.
There is nothing new nor appealing in the budget that would make doing business easier in these gloomy days of COVID-19. The government has assured it would be supporting the construction sector and soon announce a package but the question is whether it would help and what incentives it would have for businesses.
The business community was expecting from the budget to include measures to boost aggregate demand in the economy. But the reality is that this is an accountant’s budget that is bereft of any creative thinking to rescue Pakistan from perhaps the most serious socio-economic crisis the country has faced since independence, said a businessman while requesting anonymity.
Our current economic situation is very difficult right now and one cannot help observing there is something extraordinary or worthy of comment in the budget.
The government should have reduced taxes instead of claiming there are no more taxes and still a big question mark is there on tax collection and tax net. An investor who was keenly awaiting the budget unveiling said he must credit the government that no major new taxes have been imposed but the question that arises is that there is mention of 7% deficit. I would be glad to know how the government would fill in the gap when there are no more taxes and which strategy the government would adopt to manage economy, he asked.
