- Robin Hood in reverse
A handful of industrialists will be benefitting heavily from a waiver on their liability to pay the Federal Government Cess on gas consumption. Since 2012 a total of Rs701 billion was due under the Gas Infrastructure Development Cess (GIDC) to construct various gas pipelines of which only Rs285billion was deposited and half of the remaining Rs416 billion is being written off through by the PTI government. Previous governments had also failed to collect this money and a class action lawsuit against the federal government had been filed by multiple companies due to irregularities in the imposition of the GIDC. Adding the mark-up that is owed on the outstanding amount makes the total amount being written off Rs300 billion. This will be done through a Presidential Ordinance that would require passing in both houses but not necessitate any debate on the matter. Perhaps it would be better that legislation is presented in parliament so that questions can be answered as to why so many companies went to court over the collection of the cess in the first place. That the government, strapped for cash, is now willing to forgo half of what it is owed means that their case pending in the Supreme Court is quite weak, especially considering that one of the conditions for the waiver is that the companies will subsequently withdraw their cases. The contention of the companies is that the cess rate agreed with the government in 2012 was abnormally increased in 2015 without any rationale, rendering their budgets practically redundant.
Another issue that arises is that of those companies, mostly from Punjab, who have already paid their share. They will obviously feel wronged and demand some sort of a refund or a similar relief in their future payments. All told the net effect of this will mean that the government takes a massive hit on the revenue side that it will attempt to pass on to taxpayers who are already tolerating record high inflation and an increase in their tax liability. It is a clear case of taking from the poor and giving to the rich- Robin Hood in reverse.