ISLAMABAD: After the International Monetary Fund (IMF) approved a nine-month stand-by-arrangement (SBA) of USD 3 billion, Pakistan has received sight of relief but it needs to realise that the country has to do everything to increase tax revenue so that it can come out of the economic crisis, Business Recorder reported.
If the Pakistan government failed to fulfill the IMF’s condition then it seems that the authorities are making the same mistake of favouring certain groups by exempting them from taxes all over again.
A report in a local daily, not challenged by the government so far, claims that more than 50 per cent of 9,082 big retailers “will exit the FBR (Federal Board of Revenue) system due to the omission of one registration condition under the law by the government”, and that “this omission will further erode the tax base of Pakistan”.
If true, it would mean that the Pakistan Muslim League-N-led Pakistan Democratic Movement government has simply removed an important condition for integrating large retailers with the FBR system through the Finance Act 2023 just to support retailers – one of its core constituencies. The paper claims, quoting FBR officials, that about 4,800 big retailers would benefit from the recent legal change in the General Sales Tax Act. That means additional tax revenue, agreed with the IMF, will have to be squeezed out of the already heavily taxed salaried class while the big fish get to enjoy yet more time in the sun, according to Business Recorder.
It’s not just retailers, of course, because a number of sectors remain untaxed or under-taxed even as the economy, indeed the whole country, faces an existential threat that can be mitigated only by increasing tax and export revenue. Yet even now, any party that comes to power keeps retailers, wholesalers, feudal lords and real estate tycoons and their billions comfortably sheltered from their fair share of taxes.
In Pakistan, which is the fifth-largest populated country, the poverty and illiteracy rates are like lighting dynamite with a very small fuse and on top of that political instability is making it harder for the country to come out from the crisis.
It also shows ordinary people, whose votes supposedly put the political elite in power in a system of representative government, where they really stand in the bigger scheme of things. That they are the first to be thrown under the bus — in this case forced to pay others’ taxes — brutally exposes the painful reality that politics in Pakistan is only about the privileges and powers of politicians; nothing more. There’s no extent they would not go to, nor any line they wouldn’t gladly cross, to entrench themselves more firmly in power; even if it is at the cost of the common man, as per Business Recorder.
Securing the SBA made for great optics for the government. But if it uses it as a shelter and plays the same old (tax) game of protecting its favourite clients, then it will have to answer to the IMF as well as the people of Pakistan. (ANI)
Also Read: IMF asks Pakistan to cut reliance on China
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