THE recommendation by the International Monetary Fund (IMF) to bring several essential items under the standard rate of General Sales Tax (GST) at 18% has ignited concerns amongst the people. This proposal, if implemented, would have far-reaching implications for the common man, exacerbating the already burdensome inflation rate and placing an unbearable financial strain on lower and middle-income families.
At the forefront of these concerns is the potential escalation in the cost of living. Prices of essential commodities, including unprocessed food, stationery items and medicines, are already beyond the reach of many ordinary citizens. Moreover, with skyrocketing electricity and gas tariffs, agreeing to the IMF’s proposal would only compound the financial woes faced by households across the country. Tax increases on necessities such as food and medicine threaten to further widen the gap between the haves and the have-nots, pushing vulnerable populations deeper into poverty. The proposal has also sparked heated debates, with experts and the public expressing apprehensions about its immediate economic repercussions. The Pakistan Business Council (PBC) has echoed these concerns, advocating for a more comprehensive approach to engage with the IMF. Instead of burdening the populace with regressive tax measures, the focus should be on addressing underlying issues in the energy sector and state-owned enterprises through meaningful reforms. While there is no denying the necessity of tax reforms, the emphasis must shift from indirect taxation to direct taxes. Potential sectors such as agriculture, real estate, and retailers represent untapped reservoirs of revenue and must be brought into the tax net to widen the tax base. The government must not succumb to the pressure tactics of these sectors. During his speech at the National Assembly on Friday, Prime Minister Shehbaz Sharif himself acknowledged the undue burden placed on honest taxpayers and we expect that whilst considering the proposals of the IMF, the wellbeing of common man will be given prime consideration. While tax reforms are imperative for fiscal stability, they must not come at the expense of the common man’s well-being. It is essential to prioritize and pursue policies that promote economic prosperity without unduly burdening the populace.
