Increase income, not taxes

Rising tax rates have left the public in distress while the government continues to lament the low tax-to-GDP ratio. There isn’t sufficient revenue to cover government expenditures and debt repayments, including interest. Last year, the overall budget deficit was estimated at Rs6.9 trillion, which was 7.4 per cent of GDP. To reduce this deficit and increase revenue, the government is imposing more taxes on one hand and cutting subsidies — especially in the electricity and gas sectors — on the other, as part of its commitments to the International Monetary Fund. The recent Economic Survey for 2023-24 reveals that while tax rates have increased, spending on public welfare and subsidies has decreased, leading to a further decline in the standard of living. The survey references a report by the Food and Agriculture Organisation indicating that an average Pakistani family needs at least Rs53,000 per month to afford a nutritious diet — a figure beyond the reach of approximately 82pc of Pakistani families.