In reverse gear

Govt must quickly come to grips with the enormity of running the country’s finances

Amid protestations from the opposition parties, the government finally managed to have its second mini-budget passed by the National Assembly. In the process, the government has decided to reverse measures implemented by the previous government, of the PML-N, by giving greater favour to non-filers rather than forcing them to enter the tax net when buying vehicles.

The second mini-budget of the incumbent government allows non-filers of the income tax returns to purchase cars of any engine capacity, down from the 1,300cc. Further, the government imposed a 10% federal excise duty on locally-manufactured motor vehicles of the engine capacity of 1700cc and above. The government has also decided to retain Super Tax to boost its revenues.

A lawmaker has expressed fears that the economic measures introduced by the PTI could push as many as five million people below the poverty line and would make the rich richer. The government could only pass the bill after the combined opposition walked out of the House in protest.

Even though the government keeps blaming past regimes for the current economic woes, it has to shoulder some of the blame for the Rs237 billion in revenue shortfall in the first eight months of the current fiscal year.

Moreover, its decision to remove the requirement of being a filer to purchase cars will likely erode its moral authority since it has clearly indicated that it prioritises revenue collection from non-filers over bringing them under the tax net.

The PTI has been flaunting financial and business abilities of its team, but even more than six months after the general elections, the country is yet to see a glimpse of that. While inexperience might account for the government’s failure to come up to expectations, it must quickly come to grips with the enormity of running the country’s finances and fix the 'mistakes' of the past regimes and also the mistakes it continues to make.

Published in The Express Tribune, March 8^th, 2019.

Like Opinion & Editorial on Facebook, follow @ETOpEd on Twitter to receive all updates on all our daily pieces.