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.