Mini budget again



ANNUAL budgets have lost sanctity as governments are in the habit of imposing taxes and duties at will any time during the year and that too through widely criticized promulgation of ordinances.

The incumbent government has also not resisted this temptation of adding to the burden of the people through mini budgets.

It issued two ordinances on Thursday – one envisaging withdrawal of tax exemptions worth Rs. 140 billion and the other seeking additional Rs. 700 billion from power consumers in the name of grant of autonomy to NEPRA.

All this has been done in the name of tax reforms and as per commitments made with the International Monetary Fund (IMF), which has announced to release the next tranche.

No doubt, there should be no discriminatory exemptions and that too at a time when the Government is facing the uphill task in meeting its revenue collection targets.

However, as has been the case with other tax measures in this country, the latest ones would also complicate the highly agitated issue of spiralling prices that have badly eroded the purchasing power of the common man.

Withdrawal of tax exemption for the corporate sector would mean the companies would pass on the burden to the common man while consumers will have to pay more for their electricity consumption.

The measures announced by the Government might be helpful in increasing tax collection but experts argue that the country would suffer more due to erosion of trust and predictability in the policies of the Government by the business community especially prospective investors.

It is also rightly pointed out that the corporate sector is already taxed heavily while the successive governments have miserably failed to bring other businesses in the informal economy into the tax net.

The objective of increased tax collection could have been achieved by implementing measures for documentation of the economy, which were abandoned in the past under pressure from the business community.

It is regrettable that the Government has taken these measures just three months ahead of the new financial year when more taxes are proposed to be levied besides a quantum increase in electricity tariff during the next two years. Where the inflation-ridden people would go?

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