Anger over increase in sales tax. PHOTO: FILE
Muttahida Qaumi Movement MNA Farooq Sattar said that as per tradition no lasting solution to the country’s economic woes had been presented.
Sattar, whose party won a massive majority of seats from the financial hub of Pakistan, said that after the 18th Amendment, most of the constitutional subjects have been devolved to the provinces. In light of this, the federal budget should have been reduced.
“It means that as per tradition only a symptomatic treatment has been done, a permament solution has not been proposed.”
Criticising sales tax
Sattar also criticised the new government’s plan to increase sales tax by one per cent.
“Sales tax should have been reduced from 16% to 10%, instead, it was increased to 17%.”
This, Sattar said would only further burden the poor. “An increase of one per cent in sales tax will be an increase of five per cent in inflation.”
He said that sales tax was an indirect tax that is paid directly by the people while the feudalists and landowners escaped taxation. Sattar was also critical over the lack of an agricultural tax.
“The sales tax on the people, we reject it and we will oppose it.”
Sattar, who had presented his party’s shadow budget on Tuesday, said there was no scheme listed that would bring 30 million potential tax payers into the fold. "FBR and NADRA should have been made to answer on this"
“There was no increase in earnings nor were the rich were asked to give sacrifices.”
Pakistan Tehreek-i-Insaf's Shireen Mazari said that this was not a social welfare budget, rather it was a "businessman's budget."
Not a people friendly budget
Leader of the Opposition in National Assembly Pakistan Peoples Party's Khursheed Shah also criticised the increase in sales tax saying it affects not only the poor man living in the villages, but also in the cities.
Shah added that they will also protest against changing the name of Benazir Income Support Programme to Pakistan Income Support Programme. He said that they will put political pressure and public pressure on the government to not change the name.
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more or less same sort of budget PPP is going to pass in Sindh and that would be people friendly budget.
Ishaq Dar,presented the budget of year 2013 upto 2014, In my point of view he took some serious steps,that was justifies his nature and personality.About 60 to 65 percent of budget is up to the mark and remaining 35 percent,in which subsidy was not given to the people is because of the FBR;it did not take hard steps to overcome the taxpayers diplomacy.....
And I see your true colours shining through, and I see your true colours......
I think the opposition members should not complain anything bcz this budget is what they have performed last year...
@Khan: Your argument is so convoluted I don't understand. Sales tax is to document the economy. If sellers don't pay the collected tax then FBR should go after them. That's a governance and corruption issue, which is a PPP specialty. But what PMLN is trying to do is to find integrity in revenue numbers (what PPP left behind everyone knows too well) and to use existing resources to stabilize the economy while cutting non-dev expenditures. Its a good effort in such a short time. PPP was in power for 5 years and ...... us all over.
@Karachiwala: I'll tell you where the tsunami is if PML-N supporters tell me where the bullet train Is and PPP tell me where the roti kapra and makan are.
@RB Mian: I like what you say.
It's always easy to say that tax should be reduced from 16 to 10%. Easier said that done.
That said, the government really needs to start making sure that property taxes are being paid. I myself know many people in my own family that have properties worth millions of rupees all over Pakistan and barely pay taxes on them. But that would hurt Nawaz and his friends too so I don't know if that can really be done by this government. But so far, good job PML-N for being proactive.
I am happy for the nation, as they deserve this budget!!!
MQM escpecially lost its credidibility yet again when it decided to give a "goodwill gesture" vote.
@Khan: The increased sales tax rates are for Unregistered Persons. This measure is introduced to encourage their inclusion in tax net. This would also serve as a motivation for registration as the unregistered person will have a price disadvantage over registered person.
@confused: Agriculture tax is a provincial subject. For example. in Punjab, it is governed by Punjab Agricultural Income Tax Act 1997.
With this budget, PML-N has officially changed Islamic Republic Of Pakistan too Pakistan Ltd Company. The budget, in itself, is an open invitation to corruption. It is prepared only focusing the interests of large entrepreneurs and landlords, failing to address and protect the needs of middle and poor class.
I have been in job since 2003 and this is the first year in my career when there is no increase in salary of Govt.. servants...vow....if this is beginning what will be the end after 5 years,....???
we the salaried class already paying Direct Income Tax............ increasing in our slabs....... will definitely increase our misries.............. since we wil also pay equally Indirect taxes as well............. take pity on Salarid class please you ELITES.......... by God we don't run factories neither do we conceal our income........... please let us live at least...............
@Haroon: Kick start the economy via sales tax? Sounds lame to me!
Dear PPP & MQM If your budgets were people friendly then frankly we dont need people friendly budgets anymore. @Karachiwala What do PTI has to do with this budget? or remarks by Shah & Farooq Sattar. They are sensible it is time to let PMLN play freely results of performance will be visibile after 6 months, then it is wise to make any remarks.
There are no feudals in PMLN and also agriculture is most vulnerable profession where natural desaster, Govt import policy, free and fair market and demand & supply are those variables which never ensure a fixed income for growers. While if ur at job then ur earning something regardless of the fact how economy is doing overall.
It's a two plus two minus one equals to three budget. That is the traditional way of preparing the document, no change. The document is devoid of direction with no fiscal stabilisation goals. Suggest that a conference be called of senior economists in the country to review and modify the document prepared/presented by an accountant and approved by an industrialist. All sectors need to contribute towards national growth according to their productivity with emphasis on debt reduction economising financial cost. Cutting expenditures will not support effectively (Greece Economy) but revenue generation base requires to be broadened. Vertical measures are unlikely to rescue the country from economic deterioration. Rather through economic experts horizontal development planning be considered.
@Billoo Bhaya: What effort exactly? Every one has to pay sales tax at same rate and mostly poor people ...large companies pass this on to common buyers directly.. We can put a 500% sales tax but all sellers and big companies will just put that on labels of whatever we buy so eventually even a labourer will pay that tax while the seller will not be paying a penny. Both main parties in Pakistan are filled by landowners, they will never tax them. If they wants to really work for the country they must implement income tax just like all other countries .. Here in UK we poor or all those earning below £10,000 pay no income tax ... Then at 20% rate if you earn up to £35,000 and 40% tax on earning between 35k and 150k for any earnings above £150,000 you will end up paying tax at 45% rate. @Haroon: Tough measures against the poor only ? If they truly work for the country no one will criticise them but all they do is to take a slogan of no nepotism then appoints their brothers as CMs and their in laws as finance minister ... Then tax the poor while their hundreds of fellow feudals and zameendars politicians sit happily without paying any tax.
Instead of increasing 1% Sales Tax, it would have been ideal situation to bring those people under tax net, who do not at all pay any tax to the government.
For instance, there is no tax on agriculture, but despite the fact the food items are not cheap.
In Karachi, the cost of one Tandoori Roti is Rs.8/- Similarly, bread purchased from the bakery cost between Rs.55/- to Rs.75/- per bread.
I have been writing for a long time to introduce 'Receipt Culture' in the country.
For instance when I go to Gas Station, either to get CNG or Petrol, the person filling from the dispenser, does not give receipt to every one, unless asked for.
Similarly, there are so many items sold in the shops from artificial to leather products that also include shoes, where the shop keepers does not give receipt to the purchaser.
If every shop keeper is bound to issue receipt to the purchaser, he will be maintaining his account and then on the basis of his income, he has to give tax to the government.
We must learn from the developed nations as how people pay tax to the government. If someone is caught for evading tax, it become the biggest crime, but in Pakistan to evade tax, it becomes pride for every one.
I will quote one more example. If some one purchase a property, he pays 100% upfront money to the property seller, but the purchaser pay tax on the collector rates levied by the Provincial Governments
The official collector rate is more or less 25% of the property value. And rest of the 75% amount is paid to the property seller under the table.
Now whose fault it is? It is the government who has made a system where property purchaser officially conceal the amount paid to the seller of property.
To avoid such situation, the collector rates needs to be decreased drastically so the property purchaser or the seller should not conceal the amount due to exorbitant collector rates levied by the Provincial Governments.
The system of collection of tax by the government is very poor and that is one of the reason's that government find short-cuts to levy more taxes or even increase tax e.g. by increasing the percentage on the sales tax.
and i guess PTI is busy in playing cricket or trying to compel fellow members who resigned after seat allotments.
where is tsunami? please can some one answer to me.... i beg this question....please tell me where is tsunami?
I also support the government for changing the name to Pakistan Income Support Program. Benazir didn't pay for the program, neither did she initiate it nor is she the founder of Pakistan.
@naeem khan Manhattan Ks: 100% agreed.
I also agree with Mr Sattar that sales tax should be reduced as salaried class is already being burdened too much in Pakistan. It's time for agriculturist feudals and tax exempt industrialists to cough up some money for the national exchequer.
Feudals in PMLN made sure no agriculture tax is introduced. This is the price you pay for going after electables only and not giving tickets to ideological party workers. Only cosmetic surgery done by Mr Dar, this budget wont bring any major positive change in Pakistan.
Disappointed for the first time since PMLN came to power.
Increase of 1% in sales tax is not that bad, specially if it helps Govt in improving governance and fixing key national issues. Improving direct taxation requires some ground work. Therefore, we will see progress on that front (if at all) most likely in the next year's budget.
Shah and Memon and are full of hot air and for this very reason they were rejected in the last elections. In their 5 years they have reduced Pakistan to penury. Now when someone is making an effort to stem the rot they are coming up with inane arguments.
PPP & MQM should keep quiet. They've done nothing in the past 5 years this country needs a government who takes tough measures and kick starts our economy!
Sales tax is the most regressive tax any country could impose on their citizens, it retards the business sales and invite corruption. Pakistanis are well advised to increase property taxes, I know for fact that people with millions worth properties don't pay their fair share of taxes. Just look into these monstrous houses and the luxury cars running around all over Pakistan and specially near the NA and PAs parking lots, how much property taxes do they pay on these expensive vehicles and these mansions. Well, I recall that most of last legislators did not even pay their income taxes and they were millionaires in the true sense and yet they were making laws for others to pay taxes Pakistani governments living it up on the backs of salaried class and this got to stop if the country wants to be self sufficient and to sustain it self without the hand outs and loans from foreign countries. Fair taxes has to be levied on every one and we can't let the agriculture sector slide like they have been doing it for the last 65years.