Former finance minister Shaukat Tarin has warned that the “flawed” budget would lead to a storm of inflation and unemployment, as the government would get no relief from International Monetary Fund (IMF) despite massively overburdening the inflation-ridden masses.
Addressing a press conference in Islamabad on Saturday alongside PTI leader Omer Ayub, Tarin said the fuel prices will likely go up further as the government was planning to impose a petroleum development levy (PDL) on petroleum products as part of its commitment to the IMF.
“He [Miftah] will not get any relief from IMF. The government has presented a deficit budget while GDP growth witnessed the highest increase during our government in 30 years,” he added.
The PTI senator claimed that inflation has gone up to 24 percent and unemployment will increase further. “We think that the unemployment rate will go up to 25-30% while increasing the petroleum levy will increase petrol further by Rs35 per litre. If so, how will the business grow?”
Tarin added that the PTI government collected the highest revenue in the country’s history and created 5.5 million jobs during its three and a half years rule.
He also expressed fear that 20 million people can fall below the poverty line as the incumbent regime has “discontinued” social safety programmes initiated by their government. For his part, former federal minister Omar Ayub said that following hike in fuel prices, per unit of electricity was also expected to reach around Rs39 per unit while gas rates will also be increased by 400 percent.
With one eye on the IMF and the other on voters, Finance Minister Miftah Ismail on Friday proposed a Rs9.5 trillion inflationary budget amid a daunting challenge to meet ambitious targets.
The new budget for the fiscal year 2022-23 provides solace to the salaried class whose tax burden has been significantly lessened in addition to a 15 percent increase in salaries of the inflation-stricken government employees.
But his single measure – the proposal to slap a Rs50 per litre petroleum levy for an additional Rs300 billion income – has not only overshadowed some good measures but may also make it challenging for the coalition partners to defend the budget.
The government has proposed Rs740 billion in new taxes, including Rs440 billion tax measures proposed by the Federal Board of Revenue. Some of the major relief measures will be offset by the increase in petroleum prices rates due to the Rs50 per litre levy along with a 17 percent sales tax.