THERE are once again reports that the Federal Government was contemplating to announce a mini budget to raise funds for the rehabilitation phase in the wake of devastating floods in parts of the country.
These suggest possibilities are being explored to impose a flood levy on items like cars, cigarettes and over a thousand of imported goods.
Formal budgets have lost sanctity and credibility as there has been a practice for many years to introduce new fiscal measures during the fiscal year on different excuses. This year too, rumours about possibility of a mini budget started soon after approval of the annual budget and now floods have offered an excuse for the purpose. No doubt, the country needs resources for rehabilitation of the damaged infrastructure and assistance for restoration of houses, shops and other means of livelihood. However, the issue has two prominent aspects – damages and losses have occurred in provinces, which receive dominant share of the federal divisible pools and they can take care of additional requirements from their own resources; and what a pity that the national budget has no cushion to take care of unforeseen expenditure to the tune of Rs. 50 to 100 billion, estimated collection being envisaged under the mini budget. It is ironic that despite a massive increase in revenue collection during the last few years and the much-trumpeted austerity drive that is leading to closure of a number of institutions and reduced liabilities on pensions, the Government has no money to fund a highway in Balochistan and construct a hospital in the Federal Capital. In April this year, the Government opted not to reduce prices of petroleum products despite a sharp decline in the price of oil in the world market on the plea that the savings will be used to dualise N-25 Highway and now it is trying to get a nod from the International Monetary Fund (IMF) for a municipal tax in Islamabad to build Jinnah Medical Complex in Islamabad. The question arises where the money goes when there are no worthwhile developmental activities in the country as well. Prices of cars and electronic goods are already touching the sky due to other factors like devaluation and input cost and further taxation will place additional burden on people. The exact impact will be known when the items to be subjected to additional levy are identified by the FBR.
