SIX months down the new financial year, the Government, on Thursday, presented in the National Assembly the Finance (Supplementary) Bill 2021 seeking to amend certain laws on taxes and duties, which is being labelled by many as ‘mini budget’ but in fact it is a full-fledged budget as far as imposition of new taxes and duties are concerned.
The bombshell dropped on the eve of New Year envisages taxation measures worth Rs 343 billion, making it much harsher than the original budget for 2021-22, which the Government claimed to be people and business-friendly.
The measures include abolition of General Sales Tax (GST) exemptions over 150 items, increase in the rate of GST for a number of goods including foodstuff and increase in withholding tax on many items, which run contrary to the previous claims of the Government to keep the WHT regime to the minimum.
The unbearable burden on the masses already hard-pressed by skyrocketing inflation is the price for the release of $1 billion IMF tranche, reflecting poorly on the loss of political and economic sovereignty of the country and that too during tenure of a party which came to power with the pledge to get rid of foreign loans and IMF clutches.
This also showed extreme vulnerability of the country as a popularly elected Government preferred to make a highly unpopular decision just to please the IMF.
The so-called ‘mini budget’ would have catastrophic consequences for all segments of the population, especially the common man but ironically Minister for Finance Shaukat Tarin believes the new taxation measures would not increase inflation.
How the ordinary citizen would remain unaffected when withholding tax on phone calls has been increased by 5%, tax on cellular phone sets and computers enhanced and tax on bakery and dairy items (including flavoured milk, yogurt, cheese, butter, cream, desi ghee, whey and milk) significantly hiked?
No one would oppose slapping of taxes and duties on luxury items as the rich have the capacity to pay more but computers and mobiles are not luxuries but necessities of life.
People of Pakistan are already paying a higher price for these and many other items because of free fall of the rupee against the dollar and increase in duties and taxes would put additional burden on people.
Same is the case with medicines, the prices of which were repeatedly hiked in recent months at the instance of the industry and now imposition of duty on import of raw material for medicines would increase their prices further.
There is a contradictory approach of the Government on the issue of reducing the cost of doing business as taxes have also been imposed on import of machinery for different sectors.
Many services have either been taxed for the first time or the rate of taxes increased significantly and it is quite evident that the ultimate burden will have to be borne by the common man.
Has the Government considered the impact of the decision to impose taxes on books, newsprint, seeds, sewing machines, infant milk and gold?
The mini budget is going to play havoc with the life of the people as well as the industry and as a consequence the economy and family budgets would receive serious setbacks.
We hope that instead of mere agitation and protests, the opposition would thoroughly analyze the new proposals and recommend changes as well as alternative measures with the twin objectives of safeguarding the interests of consumers and raising the tax collection.
