Pakistan - Unjust duties, taxes

It seems that the PML-N government has become immune to the sufferings of the common man. In a bid to meet its ambitious revenue targets, the government has been piling up more and more taxes on products that keep the country’s economic wheels moving. The government is relying on its cash cow — the oil industry taxes, instead of taking some reformatory measures. Acting upon the proposal of the Federal Board of Revenue (FBR), the Finance Ministry has imposed additional duties on petroleum products and furnace oil, regulatory duties on steel products, scrap metal and mobile phones and slashed subsidies on electricity. Under the additional revenue measures, the GST rate on petroleum products (excluding furnace oil) will be increased from 17 to 27 percent in two stages. According to the Finance Ministry, a revenue shortfall of Rs 716 billion has forced it to take these drastic measures. The budgetary target for the financial year 2014-15 was Rs 2,810 billion that was revised to Rs 2,691 billion. The FBR has accumulated Rs 1,975 billion in 10 months (July to April) of the current fiscal year of 2014-2015. The board has to collect Rs 716 billion during the remaining two months (May and June). On the other hand, the government has decided to keep the prices of all petroleum products unchanged for May, despite a Rs 1 and Rs 1.06 per litre reduction in petrol and diesel rates proposed by the Oil and Gas Regulatory Authority.

Finance Minister Ishaq Dar is busy taking measures that might produce negative effects on the overall economic structure of the country sooner or later. He has withheld the relief of falling international oil and commodity prices in a bid to meet the IMF conditionalities regarding revenue targets. Additional duties and taxes are being imposed on common citizens who are already living miserable lives due to inflation and the energy crisis. The government pleads that the steps are necessary to meet the expenditure being incurred on Operation Zarb-e-Azb and payment of salaries.

The government needs to reduce its own undue expenses to meet the budgetary targets. Unnecessary ministries and departments should be done away with. There is a need to bring all those persons, including politicians, into the tax net who evade taxes. Instead of taking such budgetary decisions on its own, the government should bring the issue to parliament and take the opposition into confidence. Already the trickle-down effect of reduction in oil prices has not adequately reached the people and these regressive taxes will cause more resentment among the masses. The government needs to improve its tax collection system instead of unfairly imposing more and more taxes and duties.