The Senate Standing Committee on Finance has strongly criticized the tax measures outlined in the budget for 2024-25, stating that they appear to prioritize International Monetary Fund (IMF) objectives over national interests. Led by Chairman Senator Saleem Mandiwalla, the committee concluded its discussions on the Finance Bill 2024 on Saturday and is preparing to submit its recommendations to the Senate.
Key points of contention include the unequal distribution of the tax burden, particularly affecting vulnerable segments of society. The committee expressed dismay over the introduction of taxes on essential items like infant milk, which they argue could disproportionately burden families with newborns.
Officials from the Federal Board of Revenue (FBR) disclosed that while 337 tax exemptions were removed, this fell short of the IMF’s requirement to eliminate exemptions on 749 items. The IMF has mandated revenue targets, including Rs40 billion from milk products and Rs7 billion from stationery items, prompting concerns about the broader impact on the economy.
Senator Farooq H. Naik raised concerns about the implementation of IMF-driven policies without adequate consideration for local circumstances, even questioning the proposed tax on graves as an example of the stringent fiscal measures being imposed.
Senator Anusha Rehman highlighted the potential impact of an 18% sales tax on mobile sets priced below $200, arguing that such measures would disproportionately affect low-income individuals for whom mobile phones are essential tools rather than luxury items. The committee has recommended against imposing this tax on phones below the $200 threshold.
Chairman Mandiwalla expressed apprehensions that the government’s tax initiatives could exacerbate inflation by 10% in the coming fiscal year. He indicated that while the committee had proposed alternatives and rejected certain tax proposals, the government typically adopts only half of the committee’s recommendations.
In addition to concerns over stationery items and medical equipment taxes, the committee issued recommendations aimed at easing tax burdens on specific sectors and promoting economic transparency through measures such as mandatory price labeling on consumer goods.
Overall, the Senate committee’s critique underscores deep-seated concerns regarding the budget’s impact on economic stability and public welfare, advocating for policies that prioritize national interests and mitigate adverse effects on vulnerable segments of society.
