PESHAWAR: The Pakistan Economy Watch (PEW) on Sunday asked the government to reconsider imposing new taxes worth Rs 253 billion which will hurt economic activities.
“Only those subsidies should be reduced or removed which have no impact on the man on the street,” he said. Talking to the business community, he said that the FBR’s target is very optimistic which must be reduced by Rs 500 billion because this will push tax authorities to squeeze the existing taxpayers.
He said that last year FBR was given target of Rs 2,890 billion which was thrice revised to Rs 2,605 billion but if met failure. Despite lack of success, the institution was given target of Rs 3,104 billion which is difficult to accomplish without introducing mini budgets and blocking refunds.
Dr. Murtaza Mughal said that proposed hike in price of energy products is part of the plan to introduce mini budgets which will not go down well with the masses due to receding international oil prices.
He expressed fear that developmental budgets will face cuts to fulfil revenue shortfall as there is no law in the country to bar governments to slash developmental budgets which are the first casualty to balance the budget.
He noted that Pakistan is perusing fiscal consolidation while ignoring growth since last seven budgets which has taken toll on the limping economy.
Economy including manufacturing, exports, agriculture etc have not shown any progress, therefore there is no justification in hiking FBR’s target by Rs500 billion, he said.
According to a study 62 rupees out of every 100 rupees paid as taxes never make it to treasury otherwise country can easily collect Rs 600 billion in taxes.
The country would remain dependent on loans unless real reforms are introduced in the tax administration.
