Reduction in taxes on essential items imperative for people, says ICST

ISLAMABAD: The Islamabad Chamber of Small Traders (ICST) on Sunday said taxes on essentials should be reviewed to shield the vulnerable from the current wave of inflation.

Some reduction in the taxes will increase the disposable income of consumers providing them with a bit of much-needed relief, it said.

Rising prices coupled with dull earnings of the poor is insufficient to keep up with the rising cost of living which is very damaging for them, said Patron Islamabad Chamber of Small Traders Shahid Rasheed Butt.

The continuous decline in the value of rupee due to erosion in the exchange rate, ballooning trade deficit and mounting national debt has hit the lives of masses very hard, he added.

Shahid Rasheed Butt said that inflation is taxation without legislation and the latest rise in the value of the dollar will hit poor consumers who are already struggling very hard to cope with the rising cost of living.

He noted that wages have always been increased slower than the episodes of inflation which has never helped poor or the lower middle class.

Repeated erosion in the exchange rate has compromised the purchasing power of the majority of the people as many goods and services become more expensive including food, electricity, education and transport etc.

Many try to combat inflation through compromising on necessities like health, education, cooling which proves to be more damaging for them and the economy in the long run, he said.

He said that inflation results in loss of real income, damaged business competitiveness, higher unemployment, adverse impacts to household and government budgets, higher interest rates but the biggest concern is the regressive effect on people with low and fixed incomes.

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