Perception of tilt towards non-taxpayers needs to be removed
The government needs extra money to end the circular debt amounting to Rs 500 billion, pay IMF’s installments and kickstart its ambitious development projects. The government therefore needs to raise taxes. Neither the common man nor the super rich have a liking for taxes anywhere in the world, least of all in Pakistan as the abysmal tax to DGP ratio reflects. However till the state withers away in accordance with Marx’ prediction, governments will raise taxes and make laws that force people to pay them. The universal taxation principle is to tax all who earn income beyond a certain limit, without consideration from which area of endeavour other than crime it has been made. The major problem in Pakistan is that the governments have failed to bring all taxable incomes into the tax net. The ideal situation is to spare none who has crossed the defined income bracket. If the idea is to move step by step, a beginning needed to be made with the richest as a slight cut in their luxurious style of living can bring much more money to the national kitty than the taxes imposed on the commoners would.
The budget has again spared the powerful agricultural lobby that dominates the assemblies. No attempt was made by the government to persuade the rich landowners to cough up their share of the taxes. The budget has also spared those among the super rich who possess luxury cars, own palatial houses, frequently travel abroad, hold multiple bank accounts and pay hefty utility bills but fail to pay taxes.
The budget is therefore widely seen to be benefitting the rich. This explains why the Karachi Stock Exchange has leapfrogged, and now is at an unprecedented high. It relies on indirect taxes that hit the common man most. The rise in GST from Rs16 t0 17 pc has led to an immediate hike in prices, though the budget has yet to be passed by the Parliament. With the petrol pumps raising the prices of the petroleum products and CNG soon after the budget speech, there were genuine fears of the prices of all commodities going up as a consequence of adjustments in transport charges. The All Pakistan Clerks Association was the first to announce observing the black day on Friday. Other organizations are now jumping into the fray. The opposition parties who were at daggers drawn a day before the finance minister’s speech have joined hands to oppose the new tax provisions in the Parliament. The PTI has announced protests all over Punjab against the tax proposals. The Supreme Court on Friday ruled that under Article 77 of the Constitution no tax can be levied except by an Act of the Parliament. There is a need on the part of the government to make necessary revisions so that the budget is not seen to be tilted in favour of any single section of society.
