Daily Times

The federal government of PTI has presented its first proper finance bill. The total outlay of the budget is 7036.3 billion rupees, with a record deficit of 3.15 trillion rupees, which is almost 7.2 percent of the GDP. The PTI’s government had come with the agenda of change. The change in the overall socioeconomic and administrative infrastructure is expected from them. In this regard the current finance bill is in someway exhibiting the change. The broad overview of the finance bill suggests that it is more of a tax restructuring agenda then a common finance bill.

The revenue side of the finance bill is worth mentioning and interesting. The government has set an over ambitious revenue target for it self. The government is expecting to earn 5500 billion rupees in terms of taxes and duties, and it is seventeen percent more than the previous year’s tax target. This target has raised some very serious and critical questions in the mind of the tax and financial experts. For last year a so the overall economic growth is declining at a faster pace, which suggests that it will not be easy for the businesses and common men to deal with these hefty new tax regimes. It is pertinent to mention that in last year government has only been able to collect 4100 billion rupees as the annual revenue. Interestingly the GST has been maintained on the seventeen percent. This is something very rare that GST hasn’t been increased, because it is expected that GST will be increased to overcome the revenue target for the year fiscal year 2019-20.

The zero base tax system for the export sector has also been removed. The government has promised the exporters for a new refund mechanism like Bangladesh and China

The income tax slabs has again been revised. As the previous government has intentionally for the sake of political advantages excluded a large number of tax payers from the income tax regime. The zero base tax system for the export sector has also been removed. The government has promised the exporters for a new refund mechanism like Bangladesh and China. This new system will be helpful for the exporters to resolve there long lasting refund problem with the government. On the other hand almost tariff has been resettled on almost 1655 tariff lines. The tariff has been decreased on the raw materials used by the exporters and increased on the finished imported goods. These finished imported goods have broken the market of Pakistani products. Finally the government has realized the importance of ISI (import substitution industry). Now is the time for a policy shift to discourage the imports and encourage the local products.This is the only way Pakistan’s economy can survive in the long run.

The distinction between filers and non filers has also been removed. In last couple of years a new class of non filers has been introduced in the tax mechanism of the country. This was something new, because this kind of practice hasn’t been followed in any other neighboring nation. From this financial year there will be no concept of non filers. In this regard government has taken some very good steps. Firstly the ban on the non filer about the sale and purchase of the property has been removed. Secondly a non filer can purchase a property or car but he/she will have to be bound to use banking channels in this regard. Thirdly in forty five days it will be bound for the non filer to register it self with the FBR, otherwise FBR will have the authority to ask the questions about the source of purchase. For this purpose the tax system has to be automated. Any one can become filer on internet within fifteen to twenty minutes. This suggests that now everyone has to become a filer because there is no survivor for non filers in the nation.

These tax restructuring mechanism are very tough and can affect the government’s political advantages too. But it’s also true that in the long run Pakistan cannot survive without these taxes restructuring mechanism.In past few years the previous regimes had tried to stable nation’s economy with the help of false cosmetic economic management. Now is the time for the Imran led PTI government to take these hard decisions with heavy heart. Politics should not be amalgamated with economics. Survivor is tough but at the same time it’s not impossible. The sheer will and strong determination is the need of the hour.

The writer can be reached at raja_4_92@live.com