The government is also considering raising the tax on fuel and diesel being used in transportation of these items by trucks and trailers. After the approval of this suggestion, traders won’t need a reason to increase the prices of items of daily use.

There is also a suggestion to raise the exemption limit with regard to income tax in Budget 2015-16. However, the proposal to raise the salary of government employees by 10% to 15% the not been finalised so far.

According to well-informed sources at the Ministry of Finance, a proposal has been finalised to raise the capital value and capital gain taxes on transactions related to property and stock market. Duty on tobacco products is also being increased, while the subsidies on raw material that were provided to various industries, including the pharmaceutical industry, through SROs are being withdrawn, which will result in comparatively higher duty on such products. Resultantly, the prices of these items will automatically increase after the raise in production cost. After the withdrawal of subsidy on poultry industry, the prices of chicken products in the market will increase.

Similarly, the withdrawal of subsidies on various industries will increase the cost of items like packaged milk, cheese, packed yogurt and chocolates. The government’s argument in support of this proposal is that the poor do not consume such items, so there will be no burden on the underprivileged. Increasing the duty on imported electronics and cosmetics has also been proposed.

Sources also said that the government is working on making the subsidies more targeted, but these suggestions have not been finalised. Moreover, work is also being done to make tariff more balanced.