THE proceedings of a parliamentary committee on Monday highlighted the need for pre-budget parliamentary oversight besides thorough scrutiny of the budgetary proposals after its presentation in the National Assembly. The NA Standing Committee on Finance and Revenue, chaired by Syed Naveed Qamar, accused the government of persistently violating its own laws by failing to circulate and publish the Budget Strategy Paper (BSP) by May 10, besides doing little on economic reforms. It also expressed serious concern over the continued heavy reliance on indirect taxes and petroleum levy instead of sustainable expansion of the tax base besides sluggish progress on critical structural reforms, the growing burden of circular debt in the energy sector, the slow pace of reforms in state-owned enterprises and rising socio-economic pressures caused by inflation, unemployment and poverty.
In a democratic polity, the budget should be prepared in close consultation with the elected representatives as the participatory budgeting ensures that public funds directly reflect the needs and priorities of the voters. Any budget should represent aspirations of the people and input from the elected representatives ensures that community level needs are adequately taken care of. In this backdrop, it is regrettable that parliamentarians are not properly consulted during preparation of the budget and the brute majority is used to get parliamentary approval of the budgetary estimates and proposals without aligning them to the wishes and needs of the masses. The concerns expressed by the members of the committee and recommendations made on different aspects of budgeting could make a difference if the consultative process is intensified and formalized. The observations of the Chairman, Naveed Qamar were particularly important and must be reflected in the next budget if the Government really believes in transparency and provision of relief to the common man. He emphasized the urgent need to broaden the tax base through sustainable and equitable reforms instead of placing additional burdens on already documented sectors of the economy. The committee called for broadening the tax base through documentation, enforcement and administrative reforms rather than repeated increases in tax rates, adding that the FY27 budget must move beyond short-term stabilization measures and instead serve as a platform for sustainable economic reform, fiscal transparency, improved governance and inclusive growth. A steep rise in inflation has made lives of the people miserable but the Government is least bothered to take remedial measures and instead pursues policies and initiatives that add to the problem. This is evident from the fact that prices of petrol, diesel, LPG, wheat flour, electricity and onions had risen between 43% and 68% during the current fiscal year. It is all the more alarming that the cost of doing business has increased significantly in the backdrop of lip-service to the cause of reducing the cost of doing business and the sectors with potential to help overcome economic challenges of Pakistan are heavily taxed, which amounts to killing the hen that lays golden eggs. What an irony that there is a combined 37 percent tax on mobile services in Pakistan, one of the most onerous mobile sector taxation, hampering growth, mobile penetration and government revenues. Similarly, the rapidly growing sector of IT is facing so much taxation that many companies moved their headquarters to Gulf countries in the pre-war period. Property sector was also flourishing and became one of the important factors in mobilizing economic growth but heavy taxation has brought the growth momentum to a grinding halt. There is a universal demand that instead of putting more burden on existing tax-payers including salaried class and the business community, the budget for the next year should focus on bringing new sectors into the tax net and hopefully the Government will move firmly towards realization of this cherished objective.
