Financial globalisation and macro model

Pakistan’s parliament passed the Finance Act 2024, which has come into force. Most of the media commentators, analysts and economists have criticised this year’s budget and called it tax laden. They are of the view that the government has burdened the existing formal sector and adopted new taxation measures, which would affect the masses to a great extent. The government has followed fiscal consolidation where it intends to curtail expenditure and increase tax receipts. It plans to jack up tax collection by around 41% to bring fiscal deficit to around 6% of GDP in the current year while the deficit has remained above 7% since long. Direct taxation is around 40%, which reflects the regressive nature of taxation in the country. These measures protect the privileged people while the rest face the brunt.