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PEW terms budget a disappointment

June 13, 2014



The Pakistan Economy Watch (PEW) on Thursday criticized new taxation measures introduced in the budget as it will open floodgates of inflation and corruption.

Revised sales tax (ST) rate from 16 per cent to 17 per cent will add to the Miseries of dejected masses therefore this decision merits revision, said

Dr Murtaza Mughal, President of the PEW.

Contrary to the claims of the new government, budget offered no relief for general pubic, who will see hike in prices of all commodities within days, He added.

Dr Murtaza Mughal said that upward revision in the ST rate indicate that government is in no mood to uproot corruption or widen tax base to augment income but to burden masses.

Giving an example, he said that Pakistan produces five million tonnes of sugar while domestic consumption stands at 4.5 MT. Per capita consumption is 18 kg and a hike in price by Rs 7 per kg will translate into additional burden of Rs 31 billion on masses.

This will discourage consumption of sugar which will be very dangerous for insecure and malnourished poor. Government can consider slapping different slabs on domestic and commercial sugar consumers, he said.

Dr Murtaza Mughal said that government has not imposed any ST on rice or wheat flour but it would impose it on sugar which is an important kitchen item.

He said that increased ST will not help government raise a lot of revenue but it will add to illicit income of tax officials as augmented ST has direct relation with evasion. There is no ST on sugar in India but excise duty of Rs one per kg, he said.

Government has claimed to settle circular debt in sixty days but not informed how it plans to do so, he said.


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Source: Daily Messenger (Pakistan)


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