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Tax Dene walo par Mazeed Tax...Hukumat ki Tajhehat kiya? Dr. Khaqan Hassan Najeeb's Analysis
Tax Dene walo par Mazeed Tax...Hukumat ki Tajhehat kiya? Dr. Khaqan Hassan Najeeb's Analysis
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00:00Dr. Khakha Najeeb, tax increases with business activity.
00:05It doesn't increase with business activity, it just keeps increasing.
00:08In such a situation, middle class is a buffer.
00:11Can't you see that buffer depleting and ending?
00:16Look, it's true that if you don't show both technical and political will,
00:22and if you don't show retail, agriculture income tax,
00:25where there are tax gap studies, even if they are in GST,
00:30if you don't do all these things,
00:32the easier targets that have always been there,
00:35whether it is manufacturing or income paying wages,
00:39you will start targeting them.
00:41So this is a consistent behavior of Pakistan.
00:45Similarly, Petroleum Levy is also an indirect type.
00:49When we replaced it, I mean, it was sales tax, we replaced it with Petroleum Levy.
00:55It will go up to Rs. 1,300 billion this year, when you will invest Rs. 20 extra.
00:59So this is absolutely correct.
01:00But here I will say that really, I mean, you know, that time has come
01:04that a development bargain, which I call,
01:07whether it has to be done with retailers, political parties, establishments,
01:11everyone will have to do it together.
01:13Otherwise, the story is very simple.
01:15I mean, people will, in the end, have a country
01:19where now there is a loss of Rs. 8,500 billion,
01:21next year there will be a bigger loss.
01:23Your debt is increasing.
01:26You have kept a markup of around Rs. 10,000, which you have to pay.
01:29And you should also believe that you are going to do a 24-month fund program.
01:34I mean, you are standing close to Argentina.
01:35It is not a thing to do anymore.
01:37I mean, we will have to create this constituency of reform.
01:43Okay, Mr. Shabbar, very quickly,
01:45please explain to me that after the budget,
01:49what was the reason for Pakistan's sharp increase in the stock exchange?
01:54When it was difficult for the salaried class.
01:57Is there any ease or something good in this budget?
02:01Look, the unique thing is that our people do not understand.
02:05So, there are two reasons for the increase in the stock exchange.
02:09First of all, the finance bill that has come,
02:12after July 23, 2021,
02:15the share that will be bought,
02:17even without a holding period,
02:19your capital gain will be taxed.
02:22So, people have purchased shares.
02:26They have purchased shares.
02:28They have purchased shares so that they can buy shares before June 30, 2024,
02:36so that they can get them.
02:37Secondly, the mutual fund tax on dividends,
02:40if they relate it to government security,
02:43then it will be 25 after July.
02:46So, people are taking out their mutual funds and putting them in the stock market.
02:51It has nothing to do with the budget.
02:55Got it.
02:56In other words, I want to say in very clear words,
02:59in very clear words,
03:01the export that has been done with you,
03:04and the way this framework has come with the budget,
03:08only and only a very big IMF or someone's donor program can save us.
03:14Otherwise, we are going to default in this country in 3-4 years.
03:19And the local currency default has happened even today.
03:23It is inevitable.
03:24We are wasting our time for no reason.
03:28We are wasting our time for no reason.
03:30Okay, you are saying that we are wasting our time.
03:31But doctor, do you agree that we are wasting our time?
03:34And that is what is going to happen.
03:35Because in the last 6 years,
03:367 ministers,
03:38the treasury has changed,
03:39lack of policies,
03:40and the budget that is coming now,
03:42only Moody's is saying that it is fine with the IMF.
03:45More than half of the revenue,
03:47they are also saying that we will invest it in the interest payment.
03:49So, we are so stuck in interest payments.
03:51We have to make so many interest payments.
03:53How will we get out?
03:55See, one thing is that there is a lot of discussion on tax reform.
03:59That is in its place.
03:59And I think we have put some things in front of you.
04:03There is a very big reform on the expenditure side.
04:05On this, together with the provinces,
04:08from pensions,
04:10to the subsidies that we give to Pakistan,
04:13the grants and transfers that we do to Pakistan,
04:16the discussion on the NFC award,
04:18all these things are also going to happen.
04:20So, you will have to do all this work.
04:23I mean, for the people of Pakistan,
04:26this is my sense how this will play out.
04:28See, the budget that has come now,
04:30and I am privy to a document that was shared
04:32with the government of Pakistan,
04:34some time ago,
04:36in which there was a discussion on tax.
04:37A TA mission came to Pakistan in December 2023.
04:41They shared a document in February.
04:43Largely, the alignment of the budget is with the fund at the moment.
04:46That is why, if I can only say this,
04:48the macro stability that is still visible,
04:50the pickup of reserves,
04:52a little inflation has stopped.
04:53We have slowed down the economy and at the moment,
04:55we have handled a huge loss.
04:57I think, whether you agree with the government or not,
05:00that is a different matter.
05:01The government wants to cement this macro stability
05:04to remain with the fund.
05:05I think that is what even the external forces want us to do.
05:09I think that is the direction we are headed.
05:11But having said that,
05:13all the discussions that have taken place in your program on reform,
05:16that is our job to do.
05:18Now, whenever you will make a decision,
05:20you will show your will,
05:21you will bargain for development,
05:23you will have to do this.
05:23Got your point.
05:24Okay, Mr. Shabbar, the price of electricity has increased.
05:27One second, one second.
05:28Mr. Shabbar, listen to me.
05:29Yes, go ahead.
05:30Listen to me, listen to me.
05:31Look, we are going back to the point.
05:33I am only trying to say this to you.
05:36Talk to Mr. Khakhan.
05:38Tell me of a way,
05:40tell me of a way
05:42that the cost of interest is Rs. 9700
05:46in the budget of Rs. 13000
05:48and next year, we are going to borrow another Rs. 700 billion
05:51for interest.
05:53We are borrowing another Rs. 700 billion,
05:55interest will also come.
05:56So, which scientist will remove this country from the local currency default?
06:03Why are we lying?
06:05Why are we doing hypocrisy?
06:06Why are we repeatedly saying
06:08that this is not the local currency default?
06:10Tell the truth.
06:12Accept the default of the countries.
06:15Local currency is the default.
06:17Okay, and if,
06:19Ms. Laniqa, I have a complaint against you as well.
06:21Mr. Khakhan is my friend.
06:23Our budget is just that
06:25IMF is saying this, IMF is saying that,
06:27IMF did this, their team came and left.
06:29We don't have anything else to do.
06:31We just want to say this.
06:33Would you like to answer Mr. Shabbar?
06:35I have 20 seconds, doctor.
06:37Very quickly.
06:38Anika, I am saying that
06:39all this surgery is for us to do
06:41to sort out our expenditures.
06:43But the local currency default is...
06:45Look, the debt re-profiling...
06:47Pakistan's debt will only be sustainable
06:49when we make adjustments to it.
06:51I am saying this clearly.