According to newspaper reports, the government is determined to raise additional revenues during the next fiscal year by increasing sales tax on the consumer items, including textile, leather, carpets, sports and surgical goods in the country. This proposal is in stark contrast of the vision of Prime Minister Nawaz Sharif, who wants zero-rating tax status to the export sector in the coming budget. In the emerging situation in revenue collection measures, the ball is in the prime minister’s court to decide whether to increase the sales tax on the domestic sales or implement the zero-rating tax regime in the export oriented industry. An additional blow to the industry will be withdrawal of concessions on electricity charges already granted to the export sector. Currently, a reduced tax regime is enforced with regard to domestic sales of five export-oriented sectors and which way the industry will move once the concessions are withdrawn can be anybody’s guess. The industry is already struggling for its survival in the face of regional competitors.
It is not denying the fact that business and economy are the least priorities in the political circles. Politicians in the country, whether in assemblies or not, have one thing in common – how to make money at the cost of the country’s economy. The furore on the off-shore companies, in which both the government and the opposition members are allegedly involved, is meaningless as both sides are refusing to accept any illegal financial activity and are unable to learn a lesson from their mistakes of the past. It will be plausible if both sides on the divide sit together to develop consensus on economic issues and leave the politics behind for the sake of the country. Had the country offered better investment opportunities, the money would have been sent abroad. A country, which cannot stop capital flight,has no moral authority to seek foreign investment. Instead of extending tax relief, taxes are multiplied in every budget and the consumer items begin to vanish from the markets in every June.
It is the prime minister who has to take a final decision in the country and he has many things to do at a time. When the government thrust is only on revenue collection, business and economy do not find a suitable place in the priority list of the government and life goes on. The country is steel reeling around vicious circle of poverty, hunger and terrorism.The latest proposal on tax rates will not only increase the capital cost of exporters but corruption will also acquire new dimensions.
