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Saturday, February 4, 2023
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EditorialMini-budgeted tsunami of inflation

Mini-budgeted tsunami of inflation

The Finance (Supplementary) Bill of 2021 or the mini-budget as termed by the opposition was presented by the recently reinstated Finance Minister Shaukat Tarin on Thursday. The opposition is adamant to not letting the bill pass as it claims that the government is ‘selling’ off the country to outside forces. The representatives of the government, on the other hand, have said that the bill will only put a necessary amount of burden on the rich and will not become an obstacle for the poor of the country.

The bill itself brings about a hike in sales tax on many essential and non-essential items. There has been an increase in taxes on mobile phones and all sorts of vehicles. On imported oilseed the tax has increased from five percent to 17 percent and eatables such as branded chicken products will also be taxed at 17 percent. Flour mills will also be taxed at 17 percent and tax exemption for sugarcane has been withdrawn. The finance minister, however, claims that none of the changes that have been brought about will negatively affect the poor. He says that none of the products that will be taxed at a higher percentage were being used by the poor. He may be correct here, however, these taxes will make it difficult for the middle class to afford what they could previously. Therefore, such policies are likely to downgrade people from the financial class they currently exist in. A person who was saving up to buy a vehicle will have to pay double the advance tax now. This may disallow them from buying the vehicle altogether or make them wait for more time until they can save enough money to pay all these untimely increases and by the time, they are able to collect that amount, God knows what price the vehicle will be sold at that point in time in the unforeseeable and volatile future.

Although the opposition claims that the country is being sold off to the IMF, they are in no position to argue with this opinion. When the government was in their hands, they created many financial artificialities and never worked towards sustainable development and growth. These taxes and policies may make life worse off for Pakistanis but it may also take Pakistan towards a more sustainable growth pattern.

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