Budget combination of assumptions, contradictions and targeting poor will shrink economy

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On Friday, Dr. Muhammad Hanif Mughal, Chairman of Pakistan Tehreek-e-Shadbad, said that the Federal Budget combines assumptions, expectations, and contradictions. He said it would be impossible to achieve the goals set in the budget, and the budget would not lead to economic development but further economic shrinkage.

 

Dr Hanif Mughal said that the rich class had been spared, while the poor and middle class had been targeted in the budget, which would further reduce their purchasing power and affect production. He added that the IMF always insists on taxation but does not call for reductions in government spending, which is reprehensible.

 

In a statement issued here, Dr. Hanif Mughal said that the government wants to increase the growth rate to 3.6 percent, but with the steps being taken, it will be impossible to achieve a growth rate of 2 per cent ۔

 

The policymakers are repeating the mistake of considering enhanced taxation on the masses as the resolution of the problem. By increasing the salaried class tax, it is claimed that the government will receive 85 billion rupees more from them, but in reality, they will receive about 150 billion rupees more.

 

Imposing sales tax on goods and medicines, etc., will further reduce the purchasing power of the people, which will result in reduced demand and production.

 

Increasing the federal excise duty on cement will affect construction activities and reduce employment opportunities. He said five per cent of the federal excise duty had been levied on the sale of property, which is illegal, and the courts would overturn it.

 

Dr. Hanif Mughal said that instead of this unconstitutional decision, it would have been better if the sale and purchase of files in the property sector had been included in the tax, as the imposition of capital gains tax on the non-filers working in the property sector would not help the government improve tax collection.

 

Tax on inherited property has also been increased, which is regrettable. Making cars and stationery more expensive will also affect the middle class and the economy.

 

Dr. Hanif Mughal said that pensions are being called a burden, but they have not been taxed because rulers need to save the influential pensioners who receive hefty pensions.

He said that the budget has unrealistic targets that are impossible to achieve, which is why, after a few months, the IMF will issue an order to impose more taxes, but even this will not solve the problems.

He demanded that the government replace the continuous use of traditional budgeting, which hits the poor and middle classes, with a method that is both encouraging to businesses and encouraging to individuals for the sake of sustainable development.

 

In addition to ending elitism, which has brought the country to the brink of disaster, he urged that the overburdened budget be addressed as a major priority.

 

Ordinary citizens are angry at this budget, which is justified, given that sky-high inflation, increased taxes, and low growth have significantly eroded the purchasing power of the masses.

 

Since January 2019, inflation has outstripped the region by over three times, crushing the aspirations and ambitions of every household.

 

The primary reason for this pain is the government’s poor financial management, which has led to high fiscal deficits through wasteful spending.

 

Rather than solving the crisis through the budget, the government has simply decided to impose more taxes on already compliant households and businesses, a policy that will not work. 

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