More taxes
THE inevitable came to pass yesterday when Finance Minister Ishaq Dar introduced additional tax measures in order to generate Rs170bn over the remainder of the current fiscal, ahead of the resumption of bailout talks with the IMF.
The revenue to be generated, once parliament approves the bill, is supposed to help ‘balance’ this year’s budget by holding down the deficit to targeted levels and to take us a step closer to the final deal with the IMF.
Considering the limited time and options, some would argue that the government has done well. The bulk of the cash will be generated from the increase in the standard rate of consumption tax from 17pc to 18pc and the imposition of excise duty on the tobacco industry, air tickets and sugary beverages.
The rest will come from other measures, such as adjustable advance tax on wedding hall bills.
Threatened by default, the coalition had little choice but to expedite its ‘prior actions’ to meet the Fund’s demands and secure the bailout programme, which will also unblock other multilateral and bilateral inflows. But their continued dependence on indirect taxes for revenue mobilisation underscores successive governments’ penchant for taking the easy route because of the reluctance to tax the rich and mighty and expand the net even when an opportunity such as this presents itself.
The imposition of taxes on retailers, large farmers, real estate transactions, etc, may not have yielded immediate tax gains, but it certainly would have been a major step towards correcting the flawed tax structure and reducing reliance on indirect taxation, which hurts the low-middle-income households the most.
Most additional tax measures will escalate the pace of monthly consumer price inflation, which has already surged to its 48-year high of 27.6pc, and bring low-income families further under pressure.
Food prices are going up — much beyond the reach of the average Pakistani — and many expect poverty and hunger to increase.
In his speech in the National Assembly, Mr Dar admitted that the measures being taken by his government to fix the economy by controlling fiscal and current account deficits are going to be very painful for most people in the country, but claimed that these measures would ensure price stability and raise (personal) incomes.
That’s a rhetorical statement that we regularly hear from each finance minister as they heap more misery on the common people through their tax and other policies.
The new taxes may offer a temporary solution to the fiscal woes of the government, just like the IMF deal will bring short-term respite on the external front. But these are not likely to address the larger flaws of an ailing economy.
The government must dig deeper and go beyond its routine of balancing the budget through temporary fixes.
Published in Dawn, February 16th, 2023
Ali Wazir’s release
A LONG, condemnable chapter of state persecution may be coming to a close with the release of Ali Wazir on Tuesday after two years-plus behind bars. The South Waziristan MNA and PTM leader had been held in Karachi’s Central Jail since December 2020 while being tried in a string of sedition cases after his arrest for a controversial speech at a rally. Mr Wazir finally won his freedom after a court granted him bail in the remaining case against him. Bail does not mean acquittal of course, and the threat of a trial remains hanging over Mr Wazir’s head — but trying him was never the objective. This was a man who had voiced opinions that had enraged the state, and he had to be taught a lesson. The malice that underpinned his continued incarceration was glaringly apparent. Applications for bail were repeatedly turned down, and although he was acquitted of the original charge last November, three other similar cases filed against him in Karachi and one in KP’s Miram Shah kept the legislator deprived of his liberty. It did not matter that the constitutional protections guaranteed to Mr Wazir as a citizen of Pakistan — including the rights to due process and to security of person were trampled underfoot. Nor did it matter that the people of South Waziristan who had elected Mr Wazir as their representative were left without a voice in the National Assembly. Shamefully, most of his fellow legislators and sections of the media also lost their voice, willfully so, and remained silent in the face of this gross injustice.
Even more astonishing, the Sindh government, within whose jurisdiction Mr Wazir was imprisoned, appeared helpless in protecting his rights. The MNA thus did not see the outside of prison for 16 months, although he should have at least been able to attend the sessions of the National Assembly whose rules provide for production orders to be issued to detained lawmakers that enable them to do so. While this rule was not followed consistently during Imran Khan’s government, a production order was finally issued for Mr Wazir — but only when his vote was needed for the no-trust motion against Mr Khan when the then premier and the establishment had clearly fallen out. Mr Wazir’s ordeal is the very antithesis of what a society based on the rule of law looks like.
Published in Dawn, February 16th, 2023
India’s BBC raids
THE recent BBC documentary raising troubling questions about Indian Prime Minister Narendra Modi’s role in the 2002 Gujarat anti-Muslim pogrom has hit a nerve in Delhi. While India: The Modi Question was earlier banned and those who organised or attended screenings were rounded up, the Indian state has now gone after the British public broadcaster itself. Tax officials have raided the BBC’s offices in Delhi and Mumbai over claims of “vast diversion of profits” as well as “manipulation”; computers of staffers have been searched while phones have also been confiscated. It is safe to assume that the raids have little to do with alleged tax improprieties, and more to do with the contents of the documentary. The opposition as well as press freedom advocates in India have cried foul, with the Congress dubbing the actions part of an “undeclared emergency”. The BBC, meanwhile, in a diffident response, said it was “fully co-operating” with the Indian authorities.
Such tactics by the Modi government are not new. In the past, those media outlets that have failed to toe the official line have also had unpleasant visits from the taxman; journalists have been arrested as well, particularly at the time of Covid-19, for questioning the government’s response to the pandemic. This highlights a troubling trend where either the media has to fall in line or pay the price. We in Pakistan are all too familiar with such authoritarian methods to tame the media. However, India’s claims of being a democratic state are seriously dented through such moves. Unfortunately, hungry for state advertising, many outlets have yielded to pressure. The result has been an editorial line that rabidly promotes Hindutva, casts aspersions on Indian Muslims’ patriotism, and paints Pakistan as the eternal enemy, while branding all criticism of the state as ‘anti-national’. The world community needs to condemn these steps towards muzzling the media, and support those in India working for a free press.
Published in Dawn, February 16th, 2023