According to a factsheet issued by the Institute for Policy Reforms,the government has increased proportionate tax rate on petroleum products by 60 percent,causing a total welfare loss to the tune of Rs 80 billion to the people. The institute ranks the SRO concerned as the largest in the history of Pakistan, which has negated the potential benefits of the falling oil prices to pass on to the people.
According to experts, a general perception that the government revenue will fall after decline in oil prices is wrong. In fact the government will collect Rs 36 billion more revenue than it did as consumption of petrol has increased after reduction in the oil prices. It is unfortunate that the government has used the option of GST to extract Rs 70 billion from the consumers.
The country’s economy is in a shambles and the falling oil prices could bring a revolution in the industrial sector if benefits are passed on to the consumers.But the greatest increase has been witnessed in prices of the high speed diesel which is mostly consumed by low-income users.
It has become a routine matter in the country that the government announces mini budget one after another throughout the year. When the National Assembly is intact why it asserts its writ by issuing SROs is million dollar question. The institute also points out that a tradeoff between financial stability and growth is an issue seeking government’s attention. The people have been facing the worst inflation of its kind for the last seven years and need concessions, but the government is trying to mint money at the cost of the people’s welfare.
According to the institute, the low petroleum prices have the potential to stimulate growth and create jobs if the government refrains from increasing burden on the people. Experts also believe that the government should minimize dependence on indirect taxes which directly affect the poor segments of society.
The government has recently sought approval of $500 million loan from the International Monetary Fund which has more negative impacts than positive effects on the national economy. If the government really wants to revive the national economy, it will have to adopt new strategies. The world is changing at a fast rate and we as a nation should not miss the bus of economic development.
