The Pakistan Economy Watch (PEW) on Thursday criticised the new taxation measures introduced in the budget 2013-14, saying it will open floodgates of inflation and corruption.
“Revised sales tax (ST) rate from 16 percent to 17 percent will add to the miseries of dejected masses therefore this decision merits revision,” PEW President Dr Murtaza Mughal said.
Contrary to the claims of the new government, the budget offered no relief for general public which would see a hike in prices of all commodities within days, he added.
Dr Murtaza Mughal said that the upward revision in the tax rate indicated that the government was in no mood to uproot corruption or widen the tax base to augment income.
Mughal further said that the government had not imposed any ST on rice or wheat flour but it would impose it on sugar which was an important kitchen item.
He said that increased ST would not help the government raise a lot of revenue but it would add to illegal income of tax officials as the augmented ST had a direct relation with evasion. There was no ST on sugar in India but excise duty of one rupee per kg, he said.
“Government has claimed to settle circular debt in 60 days but not informed how it plans to do so,” he said.