Taxed to death

A budget that will beget more inflation and further burden an already taxed middle class was passed by the National Assembly for reasons of political complicity. As a matter of fact, even the allies of the government are at odds over the projections in the Finance Bill, but seem to be looking the other way as the country is on the edge while making the ends meet. The desire on the part of the beleaguered coalition to seek a gigantic bailout to the tune of $8 billion from the IMF, and enter into another sizzling programme with the Washington-based lender has bred extreme instability. This is so because the indices of the economy have nosedived and a challenging task of Rs13 trillion revenue collection dwarfs on its face.

The budget document also exposed the Machiavellian approach of the ruling dispensation as the PPP cut a deal with the PML-N to seek political favours, and that too at the altar of slapping a highly incomprehensive tax-loaded budget. MQM and other minions too were out to grab their bounties, and it is irksome that none had any substantial alternate proposals to float. The opposition, PTI, likewise restricted itself to customary criticism, as the second reading of budget proposals went the ‘ayes’ way. The outcome will soon be evident in the form of an enhanced 18% tax on textile and leather products; and a spiral in at-source deduction on telecommunication services, jamming the wheel of the economy in terms of production and profitability. Similarly, the raise in levy on petroleum products will be too tough to swallow.

With a targeted growth target of 3.6% — and that too when the interest rate is more than 20% — it is a daunting task to do some balancing act. Inflation is bound to skyrocket and the projection of 12% is nothing but wishful thinking. Fissures are already being witnessed as the Rs1,500 billion allocation for PSDP are being cut down, and it is feared that many of similar targets will go wayward. The shock is yet to come for consumers as electricity and gas tariffs too will see an upward revision in an already export-starved economy.