As was widely anticipated, different stakeholders including the Senate Standing Committee on Finance and representatives of the business community are offering workable proposals to review the budgetary proposals for the next financial year to make them reasonable for various sectors and segments of the society.
Prominent economists and businessmen have urged the Government to bring unregistered and untaxed sectors into the tax net instead of burdening the compliant sectors.
Trade bodies of Karachi, the financial and economic hub of the country, have unanimously rejected both the Federal and the Sindh budgets for lack of genuine facilitation to the trading community.
Pakistan Business Council and the Standing Committee of the Senate have expressed strong reservations over proposed drastic powers including arrest for the Federal Board of Revenue (FBR) fearing these could be misused to harass the formal sectors than to penalise those involved in tax fraud.
Like every year, this year too the Finance Minister and his team remained in close contact with representatives of various bodies of traders and industrialists with a view to seeking their input before presentation of the budget but the actual budget shows the process was not meaningful and consultations meant only lip-service.
This is evident from the reaction of the general public, government employees and members of the business community to various proposals of the new budget as some of them are also against the oft-repeated objectives of the budget-makers.
The Government leadership is on record having said on various occasions that there will be no additional burden on the existing taxpayers, tax burden of fixed income groups will be lowered significantly and untaxed sectors will be brought into the tax net but actual proposals are in total conflict with these lofty objectives.
It is genuinely apprehended that pressure would only mount on filers following the government’s fresh financial moves instead of bringing non-filers to the tax net.
Similarly, the government did not meet the expectations of taxpayers, including the salaried class, for relief despite commitments made earlier that relief would be provided to the Government employees and other segments of the society in view of availability of the fiscal space and declining per capita GDP.
There is a strong case for revision of different taxation proposals in view of the Iran-Israel war, which is going to negatively impact prices of oil and other commodities.
Already, the Government has hiked prices of both petrol and diesel within hours of the reports that the prices of oil have started rising in the international market after Israeli aggression against Iran.
It is also hoped that while passing the federal budget, the National Assembly will not only give serious consideration to these and other suggestions emanating from the Senate Committee and other stakeholders but also consider recommendations of its own Standing Committee on Finance.
The Committee has approved an increase in the minimum threshold for daily cash withdrawals, raising it from Rs50,000 to Rs75,000 and rejected a separate proposal to impose an additional 2 per cent sales tax on online purchases, signalling resistance to new digital levies amid growing e-commerce activity.
As the proposal to increase tax on bank profits from the existing 15% to 20% is exploitative and an anti-saving move, the Government should also withdraw this unjust hike.
The committee also turned down a contentious proposal that would have mandated all sales of Rs200,000 to be conducted through banking channels — a measure critics argued could burden small traders.
It is also unfortunate that on the one hand the Government is mincing no words in declaring that stoppage of water by India under the World Bank-brokered Indus Water Treaty could trigger a war in the region, the new budget envisages reduced allocations for the water sector as compared to the outgoing year.
This shows the low priority we still attach to the urgent need for construction of new reservoirs despite the emergence of a challenging situation.
