More taxes, duties exemptions to cause new wave of inflation
LAHORE: The Pakistan Industrial and Traders Association Front Chairman Mian Nauman Kabir on Sunday rejected the government's plan of imposing additional taxes of billions of rupees in the upcoming federal budget 2021-22, besides withdrawing duties and tax exemption of about Rs360 billion, leading to a new wave of inflation in the country.
The PIAF Chairman, in a joint statement with vice chairman Javed Siddiqi, said that that the regular attempt of economic managers to impose new taxes and increasing oil prices along with the hike in power and gas tariffs will ultimately harm the government's overall move of reducing the production cost for the businesses. He said that Pakistan is the most frequent customer of IMF and governments often depended on borrowing from donor agencies and accepted their stringent conditions despite the fact that these institutions are merciless money lenders which always forced Pakistan to adopt bad policies like new taxes in the budget, rupee devaluation and massive increases in the electricity and gas prices.
Mian Nauman Kabir said that the new taxation measures include increasing income tax burden of the salaried and business individuals and the corporate sector, as the government will also withdraw about Rs360 billion worth of sales tax exemptions from next year while the sales tax is already high.
He said that the country's economy is recovering from a slow pace of growth and it will be an uphill task for the FBR to chase the high target of tax collection.
It is impossible for the Pakistan's economy to sustain the burden of additional tax burden equal to 1.5 percent of the GDP at a time when the economy just recovered from the Covid pandemic, he pointed out.
Mian Nauman Kabir resented that the frequent increase in electricity tariff and petroleum products' prices along with burden of new taxes on the behest of the International Monetary Fund is dangerous game for the economy of the country, as it would make the Pakistani products uncompetitive in the international market.