Rich whether in any mighty government institutions are not included, as ever the filthy rich business men are also not included, The FY25 budget has been passed, potentially securing next programme from the IMF (International Monetary Fund) and unlocking up to $7.5 billion in external flows. While this is a rare positive note, the budget lacks substantial reforms and strategic direction. It is described by some as a “Form 47 budget,” as the total tax revenue figures fail to align with the actual budget measures (Form 45).
Those lacking political power, organized lobbying, or the ability to influence the government are more likely to face increased taxation. This sums up the budget: formal businesses and their employees, who contribute significantly to the economy, are at a disadvantage. Multinational corporations and large local businesses, crucial for investment, are frustrated by the harsh taxation measures.
Meanwhile, non-filers will likely continue evading taxes despite higher withholding rates and threats such as SIM blocking or restricted foreign travel. The government made no significant effort to reduce sales tax on dairy products, including baby food and infant formula.
Attempts to lower income tax for exporters failed, though they did manage to prevent an increase in the FED for first-class air travel, leaving economy and business class travelers to bear the burden. Their counter offer for revenue neutrality included taxing stock market transactions, surcharges on high incomes, and measures affecting the urban middle class. Civil and military bureaucrats, however, received exemptions on tax from property sales.
While growth and employment-generating sectors are heavily taxed, certain “sacred cows” remain protected. The government succeeded in insulating fertilizers from regular sales tax regime, leveraging coalition partners’ votes and possibly influence from powerful quarters. The PPP (Pakistan People’s Party), for example, publicly opposes the taxation measures but benefits the most, gaining influence over bureaucracy and increased FBR (Federal Bureau of Revenue) taxes without political or financial liability. The KP CM and FM also benefited, securing more funds to spend while also scoring political points against the federal government.
