Critics of Pakistan budget have unleashed their criticism on the government’s economic plan without realizing that this budget has some admirable elements such as:
- The proposed GST reform that will levy a 15% flat tax will not apply on health, education and food items consumed by the poor,
- The exemption limit for salaried taxpayers is to be enhanced from Rs200,000 to Rs300,000 benefiting approximately 430,000 taxpayers,
- Additional tax relief of about two billion rupees have been provided to benefit 300,000 taxpayers of Khyber Pakhtunkhwa, FATA & PATA,
- Federal government employees will be allowed an ad hoc monthly allowance equal to 50% of one month’s basic pay. This benefit would not be available to such federal government employees who are already in receipt of a monthly allowance equal to one month’s basic pay,
- This budget has been prepared by the technocrats and not the politicians. It has been made as per the text-book (read: IMF diktats).
But fact of the matter is that this budget is not pro-poor by any standard because the revenues rely on indirect taxes which are to be paid by everyone irrespective of their capacity to pay. This has triggered and will trigger more inflation and will make the life of common man really difficult. A pro-poor budget should have a minimum of 65% of revenue from direct taxes like income tax which is paid by wealthy people. This budget collects 65% of revenue from indirect taxes and is pro-poor only to the extent of those poor who are called privileged class. In this country, a person who can not make both ends meet pays as much tax as a person having palaces and limos. This is gross injustice and breeds hatred, frustration and unrest which will be disastrous for the society.