In the economy of Pakistan shortage in reveres usually is
occurred the main reason is insufficient tax collection or high target is made
for tax collection in fiscal policy. If you go through the history of Pakistan
shortage in reverse is not rare due to tax collection. Recently reverses are
short up to Rs 196 billion. To cope up from this issue changes in fiscal policy
is made accordingly by ministry of finance. Additional taxes are levied for
generating reverses. These additional taxes are directly or indirectly leave
effect on public and consumers. Such as usual practice has been observed so far
that indirect taxes are increased like GST or withholding taxes, custom duties
etc. These indirect taxes create major impact on prices of goods and services
and after some months or weeks the result will be shown in form of inflation.
According to legislatures due to imposing additional indirect taxes consumer cannot take advantage of
falling in oil prices. As per ministry of finance falling in oil price in
international oil market and commodities prices. They also declared that
taxation department does its job with honesty and responsibility and there is
no corruption is found in taxation department. In the recent scenario my
opinion is that investment opportunities should be adopted instead of fulfills
government's expenditures through borrowing. As Pakistan is already hunted by
huge burden of debts and debt servicing is not sufficient moreover circular
debt is taken place due to bad debt servicing. If you see from the government’s
point of view to fulfill its expenditures via increasing taxes on petroleum
product may be right but when you think about the consumers they must be affected
by this policy. Consumer will not take the advantage of falling in oil prices
in international market. GST on oil
products will be increased from 17% to 27%. As far as concern this not the way to
achieve your reserves target, government need to review its target for reserves
via tax recovery it should be realistic.
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