Undeniably, the government will not plan to fly blindly into the dark clouds.
KARACHI: Crafted in the midst of unprecedented uncertainties engulfing the economic situation in our country, the federal budget was unveiled more than a week back. It is because the country has now entered into the second round of structural adjustment plan proposed by the IMF apart from facing the retardation of economic growth due to lockdown measures. More than that, with the major slump that has hit the global economy ¬– having the propensity to dwarf the great economic crash of 2008 — Pakistan’s export earnings and remittances have been adversely affected.
With so much uncertainty, it is difficult to foresee and plan ahead, therefore the best way forward may be to take it as it comes. However, if the government has hiked the taxes by 27% with no “credible revenue plan”, we can give them the benefit of the doubt by assuming that the finance team might be in the process of conducting talks for the IMF’s second review that was due this March.
Undeniably, the government will not plan to fly blindly into the dark clouds. Framing a revenue plan in stressful and testing times is a battle in itself. Therefore, broadening of the tax base seems to be the best strategies to prevent a liquidity crisis in unpredictable situations. All of this requires bold and decisive decisions at the right time.
Hadia Mukhtar
Published in The Express Tribune, June 21st, 2020.
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