Finance Minister Dr Hafeez Sheikh, usually known to reveal more than he conceals, has minced no words on the ticklish issue of expanding the tax base and taking action against tax evaders. But at the same time, the government appears to have given in to the pressure of a powerful agriculture lobby to retain subsidies on wheat and fertilisers for the next fiscal year.
The minister made the announcement in his speech in the National Assembly on Friday that marked the end of budget debate. The legislative pressure that forced him into reneging on his earlier promises also violates the government’s commitment to the IMF last month to rein in spending on subsidies. Dr Sheikh complained about the attitude of the unspecified “powerful lobbies” that he said were unhappy with the measures aimed at bringing into the tax net those who were out of it. The observation came after more than a dozen PPP members staged an unannounced boycott of his speech to protest the imposition of sales tax on farm inputs. Meanwhile, the finance minister urged parliamentarians to set an example by paying their taxes “honestly” and also appealed to all the rich people like industrialists and media barons to carry out this “national duty.” Like other wealthy segments of society, the media groups obviously cannot be excluded from the tax net. The media are as much responsible to pay taxes as other sections of soictey and they need to practise what they preach.
The finance minister was right in that the parliamentarians had the biggest responsibility of paying taxes as the government could not ask the common man to sacrifice until “our own hands are clean.” This was a timely reminder to politicians who do not tire of preaching good governance and transparency in their election campaigns but fail to lead by example when elected. It is time the government also extricated itself from the pressure of the “powerful lobbies” that restrain it from taking tough measures vital to economic recovery.
