Former PM shows concern over disproportionate taxation policies saying privileged class of society still spared in federal budget while more taxes imposed on common man and salaried class. Former finance minister Miftah Ismail asks govt if IMF directed to provide Rs600 billion to parliamentarians.

ISLAMABAD   -   Pakistan’s former prime minister and once close aide of PML-N President Nawaz Sharif, Shahid Khaqan Abbasi, has criticised the tax exemption granted to civilian bureaucrats and military personnel in the latest budget announced by the PML-N-led allied government saying this would not further aggravate the economic worries of a common man.

“The country would not move forward if tax is not collected from powerful segments,” said Khaqan at a press conference along with fellow Awam Pakistan party member Miftah Ismail, here yesterday.

He criticised the federal budget 2024-25, labelling it as the worst in the country’s history and lamenting it as the third consecutive disappointing budget under the current government.

“If you sell land or house, a tax of 2.5 to 4.5 percent has been imposed on it. But there is a clause kept in it which I don’t think any government can justify it. Civil bureaucrats and military personnel whether serving or retired have been granted an exemption. I am absolutely in favour of giving exemption to the family members of martyrs who have houses. But a path has been opened that will spoil the whole matter. Tomorrow the people will ask if they can get an exemption then why can’t I get it.”

Abbasi condemned the budget’s economic implications, highlighting that the government expenditures now account for 25 per cent of the GDP.

He expressed concern over the disproportionate taxation policies, asserting that such measures often lead to significant reductions in disposable income for the average citizen — a scenario more commonly witnessed in countries where the government shoulders the entire fiscal burden. The former PM also raised questions about fiscal governance, pointing out discrepancies in tax collections from sectors like tobacco manufacturing.

“No reform agenda is included in the recent budget.”

He called for an end to misappropriation of funds. The former premier said all the ruling coalition parties were responsible for presenting the tax-laden budget.

The former premier asked what the government would do in the next budget. “Will it slap 60 per cent tax on the salaried persons?” He urged the government to privatise power distribution companies and cut their expenses to steer the country out of the ongoing economic crisis.

He also stressed the need to tax the lawmakers too.

“No reform agenda is included in the (recent) budget.” The former premier said all the ruling coalition parties were responsible for presenting the tax-laden budget.

Abbasi added that the coalition parties should act to stop the government imposing harsh taxes on the masses while highlighting that the inability or rather culpability of government for not taxing the tobacco sector.

Highlighting Pakistan’s substantial financial outlay on interest payments, Abbasi criticized the lack of measures to combat diesel smuggling and the absence of economic benefits reaching the people of the Federally Administered Tribal Areas (FATA), despite their integral status within Pakistan.

It is to be mentioned here Ismail and Abbasi last month had launched their new political party, Awaam Pakistan.

The launch was largely expected after the duo parted ways with the Pakistan Muslim League-Nawaz (PML-N). Both were key figures in the PML-N.

The PDM government was formed in 2022, following the ousting of Imran Khan as prime minister.

Ismail and Abbasi have both been vocal about their criticism of the current government’s handling of the economy and have promised to bring about positive change if elected.

For his part, Miftah Ismail, who stepped down from all PML-N positions last year, said the IMF did not ask the government to exploit the middle class.

Firing a fresh salvo at the government, the ex-finance minister asked if the IMF directed to provide Rs600 billion to MNAs.

“Did IMF ask you to spend 24 per cent [of the GDP] on fake expenditure?”

He further asked if the IMF directed to impose a 10 per cent surcharge on the income tax of high-earning individuals. In the fresh budget, the government proposed a 10% surcharge on the income tax of those individuals (salaried and non-salaried) who are earning over Rs10 million per year.

He also criticised the government over the exemption to industries in merged areas of erstwhile Fata.