Tax system in Pakistan

This refers to the news ‘Government stops funds for development projects to finance budget deficit’ (May 27). It is unfortunate that successive governments, instead of strategising and planning effectively based on upcoming market outlooks, always feel the need to pass on the burden of inflation and market volatility to the hapless poor and working classes.

In this regard, the policymakers should take a cue from the British government’s pragmatic decision of raising additional revenues instead of further inconveniencing the blue collar people. To help protect the vulnerable from the fallout of inflation, London recently raised taxes on oil giants, raking in windfall profits from the ongoing price volatility. Our government, too, instead of slashing development expenditure and proposing cuts in the already meagre higher education budget and health resources, should consider imposing higher taxes on sectors/entities making huge profits or those not paying their fair share to the government.

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These sectors include banks, big farmers, real estate, automobile, cement, fertiliser industry, sugar mills, traders, high-earning professionals and restaurants, etc. Another source of additional revenue for the government is the imposition of additional health tax on the sale of tobacco products and sugary drinks.

The government’s recent decision to ban the import of non-essential items is a step in the right direction to arrest the outflow of dollar from the national market, but more can be done to address the problem. For example, the government can reduce the travel allowance and discourage the purchase of foreign exchange.

For now it appears that the government does not want to take hard decisions that affect the status quo and lifestyle of the richest of the rich. Further curtailing essential services for the poor is an ill-advised measure, which will only lead to expenses incurred on account of poor health and frustrated people looking for ways to vent their agony and anger.



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