The dismal trend of revenue collection suggests that the government is likely to hit a shortfall, paving the way for an inevitable mini-budget. The Prime Minister, however, thinks otherwise and has laden an inefficient tax machinery with the additional task of not only achieving the desired estimated target but also overcoming the lingering litigations in the court of law, making a critical recovery of at least Rs100 billion. But that is unlikely to happen. If book-keeping is any criterion, it is assumed that the FBR might also miss Rs957 billion target set for the month of January. The revenue gap is further projected to widen up to Rs900 billion within a year.
The government has already closed FY24 with a stop-gap arrangement as it was unable to keep its promise with the IMF on tax collection. There seems to be a lack of trust between the taxpayers and the government as the levy of taxes on immovable properties has been challenged, and so is the case with the super tax and the capital value tax.
It is ridiculous to note that rejoinders from the government in the appellate tribunals are not up to mark – something that has compelled the Prime Minister to wax the legal department prompting them to do the needful. The disposal of cases is unlikely to happen in time to help overcome a staggering Rs386 billion deficit. This, coupled with corrupt tax officials as most of the work is still manual and discretionary to this day, has put the circle of budget and expenditures in a fix.
It is an enigma that the tax paradigm is highly fleecing and the commoners and the middle class are at the receiving end. Salaried class has been taxed to death, and a mandatory GST on every purchase has torpedoed the purchasing power of all and sundry. In such a scenario, the talks of raising the tax-to-GDP ratio up to 13% are nothing but a mirage, and a mini-budget looms large. Austerity measures as well as reforms are mere buzz words and the economic stupid cannot be fixed in such a flimsy environment.
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