Daily Times

Exports will be harmed, and poverty-stricken citizens may see their standard of living worsen as prices for nearly everything go up and their purchasing power shrinks as a result of mini-budget, according to the business community.

Over 150 items will be subject to a 17.5pc sales tax as part of the fiscal tightening measures proposed by the government in order to win the IMF program. Indirect taxes, says economist and financial analyst Ateeq Ur Rehman, directly affect the end-user, raise production costs, and ultimately increase inflation.

Luxury goods such as mobile phones, cars, and confectionery may soon be banned or heavily taxed in an effort to close the massive trade gap between China and the United States. Many of these items and categories should be reconsidered before imposing sales tax, such as imported machinery and pharmaceutical raw materials; energy-saving lamps/tube lights; cotton/sunflower/canola seeds; baggage of Pakistani expatriates; and energy-saving lamps/tube lights.

Furthermore, he said that because Pakistan is still in the process of becoming a developed economy, imported plant and machinery needs to be brought in as a part of the fixtures and fittings. Our manufacturing and industrial capacities must be expanded with the aid of machinery and equipment in order to meet the needs of both the domestic market and exports.

If the sales tax is imposed on the import of pharmaceutical raw materials, it will raise the cost of medicines, and this tax will ultimately be passed on to consumers.

This year, he claimed, we reached a new record for agricultural output; he claimed that imposing a sales tax now would thwart our efforts to expand cotton, sunflower, and canola production.

Adding value to inflation by taxing food supplements and energy-saving lamps in the luggage of Pakistani expatriates will have a direct impact on the consumer.

The Korangi Association of Trade and Industry (KATI) has rejected the government’s mini-budget, the removal of 343 billion subsidies, and tax increases. He also expressed concern about rising petroleum prices. Farrukh Qandhari argued that the mini-budget would not only harm the economy but also burden the citizens of India. He argued that instead of broadening the tax base, the government was burdening those already taxed to the point of insolvency. Government price increases on petroleum products will only serve to raise consumer prices.

Previously, the government would use inflation to punish the people, but now, according to the Acting President, prices are rising across the board. New taxes were imposed in the mini-budget and the price of petroleum products was raised on New Year’s Day to give the people the gift of inflation. The price of electricity was raised just a few days earlier. To him, it’s becoming increasingly difficult to run the industry because of this situation; there are growing fears of industry closure and job losses that could lead to an increase in criminal activity. If the government wants to avoid increasing the burden on current taxpayers, Farrukh Qandhari urged it to widen the tax net and reduce indirect taxes on the less fortunate.

The recent mini-budget has triggered a new wave of inflation in the country, according to Vice President of Pakistan Businesses Forum (PBF) Ahmad Jawad.

On behalf of the business community, he congratulated Irfan Iqbal Sheikh (President-Elect) and other FPCCI office bearers from the BMP and UBG groups on their victories in the FPCCI 2022 elections.

In addition, he warned that the government’s efforts to lower the cost of production for businesses will be harmed by economic managers’ regular attempts to impose new taxes and raise oil prices, as well as the rise in power and gas tariffs. As a result of Pakistan’s economic woes and policymakers’ directives to take harsh measures, the country’s economy will continue to deteriorate. Unfortunately, the government has given its approval to the economic team to complete all prerequisites for restarting the stalled program under the $6 billion Extended Fund Facility, despite the difficulties faced by the trade and industry sectors in this country. According to him, in order to meet IMF requirements, the new taxes will have a devastating effect on the country’s export and domestic industries.