Hukumat Tax Policion Ki Nakami Ka Malba Tankhwa Daar Tabqay Par Kyun??
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00:00We are divided into two groups, those who are in the job market, whose at source tax is cut.
00:08But those who are retailers, exporters and those who are in agriculture, property,
00:17whether they pay the tax or not, we have to pay the tax and our tax has to keep increasing.
00:21But on the other hand, the government officials and employees who are present, their salary increases.
00:27In the private sector, even that doesn't happen.
00:29So at this time, there is so much burden on these unemployed people, the unemployed people of the salaried class.
00:36There is so much burden that we might be expected to run the whole of Pakistan.
00:41So what do the other sectors have to do? Let's talk about that.
00:44Mr. Haroon Sherry is with us.
00:46Well, thank you very much, Mr. Haroon. You joined us.
00:49Mr. Haroon, first of all, tell us how much more burden can these unemployed people of the salaried class bear?
00:57Because the way the salaried class is being squeezed at this time,
01:03the middle class will be squeezed more, the buffer of the middle class will end.
01:08Yes, thank you very much, Anika. You are absolutely right.
01:12This is a regressive step, because your income is declared and you have increased the tax on it.
01:23And by taxing the declared income, you are adding to the additional taxation of $3.5 trillion.
01:34Secondly, to please your collation partners, there was no need to increase the Public Sector Development Program.
01:42You increased it by Rs. 400-500 crores.
01:45And to recover that, you shifted the burden on this class.
01:51So there is no policy of taxation, but our policy is more regressive at the moment.
01:58This is not a policy to create progressive incentives.
02:02A class that is already suppressed by inflation, the economy has grown by 2%, 2.38%.
02:09Their economic opportunities are shrinking.
02:12And on top of that, the expenditures of utilities are increasing.
02:15They cannot borrow, the interest rate is high.
02:18After that, we have put the burden of tax without saying, or we say that we have also sacrificed.
02:25You should also do it. Then it would have been possible.
02:28Right now, we have sacrificed, but we have increased the salary of government employees.
02:33And the perks that they will get fuel, fixed electricity, they do not care about the variation of these items.
02:42Right. But Mr. Haroon, at this time, it often happens that the government thinks that we will tighten our shackles on retailers.
02:51This work was done in the past month or so.
02:54But retaliation came, the government backtracked.
02:57This is a class of salary class that does not retaliate.
03:01So the government constantly puts pressure on them.
03:05Can this policy remain in place in the long term?
03:09First of all, this is not a policy.
03:13This is an administrative action.
03:16See, the policy of tax is that you not only have to expand the tax net.
03:21In that, you have to bring in a retailer, a real estate agent, you know, the rest of the agricultural income.
03:30This is a policy direction.
03:32But there is also a target in this that how much you have to do in the first year, in the second year, in the third year, you know.
03:38Right now, all the perverse incentives are that you do not go towards documentation.
03:44Because they can see that the government wants to balance the book.
03:48The government is not raising money for the revival of growth or for the service delivery of people or for human development.
03:56The government is raising money for running its own business, for the salary that has to be paid, for the interest to be paid, you know.
04:02And for that, through MNAs, they have to do PSDP, they are raising money for that.
04:07According to me, this is an unfair contract that will not be sustained.
04:13Even now, the relationship of patronage, you see, the pressures have started to come.
04:17Now, the lobbies will pressurize.
04:19Then, you know, adjustments will start in it.
04:22The question arises that what is the sanctity of the budget numbers if you start bringing changes within a month?
04:29Okay, Mr. Haroon, at this time, another very important thing is that half of Pakistan's economy runs through the black economy.
04:38And that, especially on the western side of Balochistan, we see a little more.
04:44Despite all the precautions being taken, this is a very good issue.
04:49Why don't you incentivize that economy to become a part of the national economy?
04:56Take tax from there, give tax to everyone, come towards direct taxes instead of indirect taxes.
05:03Is there no capacity in the government or not?
05:07You are talking about a policy shift.
05:10This budget is moving towards a policy shift.
05:13Budget, by definition, is an instrument of public policy, how to finance policy.
05:22There is so much speculation on the budget and lobbying is because there is a loss of policy and it is unclear.
05:31Then people play in the budget, lobbies come.
05:34So what you are talking about, I will not necessarily call it a black economy, I will call it an undocumented economy, informal.
05:41To bring this informal economy under control, you have to give incentives to document it.
05:49The trust deficit is so big that no one is ready to sit at the table and come up with a solution to it.
05:57Vested interests are so powerful because there is so much money being made on that economy, especially in smuggling,
06:04that they have no interest in regularizing it.
06:07According to me, you can see other people in these sectors.
06:12Either it is a hidden thing.
06:14When people see it, it creates horizontal equity in the system or in taxation.
06:22Then people will be able to tolerate that these people are having fun, so why us?
06:28It is important to end this thing and for this, a very clear policy should be given.
06:35Absolutely, Mr. Haroon Sharif, thank you very much.
06:37One thing is for sure that as long as we give knee-jerk reactions in Pakistan, we cannot go towards a solution in any way.
06:44Policy should be made, ad hoc decisions should not be made.
06:48Decisions should not be made on an emergency basis, which we can see in this budget.
06:52There are good things and there are bad things.
06:54But unfortunately, the burden on the salaried class will be felt very badly.