Budget 2015-16: Opposition slams hike in sales tax rate

Term budget ‘not people-friendly’, based on temporary solutions

ISLAMABAD:

Leading opposition parties on Tuesday reiterated their objections to the federal budget 2015-16 as the lower house of parliament took up debate on the fiscal policy and allocations for the coming fiscal year.

Pakistan Peoples Party (PPP) lawmaker and Leader of the Opposition in National Assembly Khursheed Shah opened the debate by saying that the budget was not people-friendly. He criticised the increase in sales tax, which, he said, would affect not only the poor man living in villages, but also in cities.

He said his party will also protest against changing the name of Benazir Income Support Programme to Pakistan Income Support Programme. “We will put political pressure and public pressure on the government to compel it not to change the name,” he said.



Pakistan Tehreek-e-Insaf (PTI) lawmaker Asad Umar also criticised the government for presenting Rs139 billion supplementary grants which were Rs65 billion last year. He alleged that the Pakistan Muslim League-Nawaz (PML-N) government formulates policies for the benefit of the rich.

Umar demanded that the GST should be reduced to 15 per cent and it must be further brought down to 12.5 per cent over the next two years. He also demanded withdrawal of Gas Infrastructure Development Cess (GIDC).

He said five mini budgets have been presented during last one year but due to ‘its incompetence’, the government missed all targets. “The SRO exemption cost increased from Rs237 billion to more than Rs630 billion in just two years,” he added.

He said the GST increased on all products but on diesel it increased to 28 per cent due to which cost of electricity doubled and price of gas increased substantially.

The PTI leader said no improvement could be ensured in recovery of taxes; there was no reduction in electricity theft while no effort was being made to recover ill-gotten money stacked in foreign banks and invested in property.

Umer suggested that at least 15 per cent increase should be given to government employees in their salaries and the minimum wage should be fixed at Rs15,000 per month. He also suggested imposing net assets tax to reduce the rich-poor gap.

“The Federal Board of Revenue (FBR) should be made autonomous and free from interference to enhance revenue,” he said. In this regard, he asked the government to launch crackdown on tax defaulters while using 3.2 million tax avoiders database available with the FBR and National Database Registration Authority (NADRA).

Muttahida Qaumi Movement’s Farooq Sattar said the budget presented no lasting solution to the country’s economic woes.  “As per tradition only a symptomatic treatment has been done, a permanent solution has not been proposed,” he said.

Sattar said there is a need to reduce the prices of electricity, gas, oil and urea. He also criticised the government’s plan to increase sales tax by 1%. “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 as an increase of 1% in sales tax will be an increase of 5% in inflation.”

Published in The Express Tribune, June 10^th, 2015.