Fiscal matters are complicated, and most of the criticism levied against Pakistan’s budget 2024-25 emerged from rhetoric and political sloganeering until former Prime Minister Shahid Khaqan Abbasi spoke about it. In his presser, the economically informed former close aide of Nawaz Sharif raised pertinent questions and criticized the tax policies for their actual shortcomings. The all-evasive, divine elite still stands exempt as the government announced immobile property sales and buying tax. Civil bureaucracy and military personnel, who own acres of land, are surprisingly left out of the property tax.
Unless the elites are taxed, expecting taxes from middle and lower classes is a lost cause. There is no economic vision to begin with if there is no tax equality. Like people, these discrepancies also run in the government’s taxation of certain sectors while giving an easy couch to others, such as the giant tobacco industry. The former PM has done a remarkable job separating IMF’s requirements from the government’s own complacency in retaining the perks and privileges of elites. 25% of GDP expenditures merely on the lavish lifestyles of parliamentarians is the sheer inequality that threatens Pakistan’s economic well-being. It seems, however, that we are not ready for this conversation yet. Shahid Khaqan Abbasi has aptly pointed out the absence of any intent to reform, and hence, economic visioning is as elusive today as it has been over the years. Expanding the tax net, including more sectors in the tax cycle, and taking tough decisions are all only a half-baked effort if these pertinent matters are not addressed. The burden of taxes mostly falls on the middle and lower classes, who bear the brunt of raised GSTs because the giant industries find ways to escape paying taxes.
Electricity tariffs are just one example of how the tax net injustice breaks the back of already disadvantaged people. For the government to take note, the budget is not the final word, and fiscal policies should be more representative of covering the inequality instead of sharpening it further. Genuine criticisms need to be addressed, and taxation must apply to all—especially the rich.