To say that the Pakistan Tehreek-i-Insaf (PTI) government has failed to come up to the expectations of the people is to put it mildly. There is an emerging consensus of opinion in the country that the government has miserably failed to translate its pre-election promises into practice and provide relief to the masses.
Critics say the PTI government has pushed the country deep into an economic and financial crisis. Harsh taxation measures, coupled with rising prices and inflated utility bills, have upset the monthly budget of the average household in the country.
There is a rising crescendo of protest from all sections of the people. Businesspeople and traders, who played a crucial role in getting the PTI elected in July 2018, have been the hardest hit. The rupee-dollar imbalance and harsh budgetary measures have raised the cost of doing business. Traders are not only feeling the heat of rising taxes but also suffering due to declining sales.
Representatives of various trade organizations have been openly attacking the government’s “unfriendly” business policies which they claim were devised without taking any input from their recognized representative bodies, like the Federation of Pakistan Chambers of Commerce and Industry, Karachi Chamber of Commerce and Industry and Lahore Chamber of Commerce and Industry.
Last week, thousands of businessmen and traders participated in a rally held in the port city of Karachi to protest against an “anti-business” budget presented by the government for FY20. A convention of hundreds of businessmen held in Multan issued a seven-day ultimatum to the government for withdrawing the harsh taxation measures. Traders have also warned of a nationwide shutdown at the end of the ultimatum if the government does not withdraw 17pc sales tax on businesses, stop sending Federal Board of Revenue (FBR) officials to harass traders in markets, reverse the increase in tariffs of power and gas, revise down the key interest rate and fails to stop a freefall of the rupee against the dollar. Traders have also sought a reduction in tax rates on withdrawal of over Rs50,000 from banks as well as the removal of requirement to obtain CNICs of all bulk buyers.
Over 700 textile processing mills suspended production at their factories, saying that the cost of doing business had increased by 40pc due to the 17pc sales tax on registered and 20pc on unregistered buyers, which no one was ready to pay. Businessmen also asked the Federal Board of Revenue to hold talks with traders’ representatives or else they would not be allowed to enter the markets. Talking to a group of leading exporters, Lahore Chamber of Commerce and Industry President Almas Hyder said the withdrawal of the zero-rated regime would badly hit exports, especially small and medium enterprises, and widen the trade deficit at the cost of a ballooning current account gap.
The suspension of business activities and the resulting chaos in the market has not been without its effect on the common man. Unemployment has been rising and small vendors and suppliers are not getting any new orders. The salaried class has also been affected by the government’s decision to reduce the tax exemption limit to Rs600,000 annually.
Objectively speaking, there is nothing wrong with the government drive to bring non-filers into the tax net. There are large numbers of rich people who live in palatial bungalows and drive luxury cars but they do not file tax returns. It is time the rich were coerced to pay their taxes. But in its zeal, the government has also targeted low-income groups and put an additional tax burden on them. This has created a sense of unrest among the people. The government needs to pay special attention to this aspect of the situation and provide relief, where due. Equally important is the need to hold dialogue with representatives of business and industry to redress their genuine grievances, enabling them to play their due role in economic growth.
In the meanwhile, the country’s opposition parties have begun regrouping in order to mount a new challenge to the government, facing the wrath of the people under tremendous financial pressure from rising prices. As part of their new strategy, they have decided to mark July 25, the anniversary of the 2018 general election, as a “black day” to highlight alleged irregularities in the last elections.
At the same time, the opposition parties started a new move to remove Senate Chairman Sadiq Sanjrani. The opposition also plans to bring a no-confidence motion in the National Assembly. It will also attempt to exploit people, who are not happy with government policies, which have led to an unprecedented price hike in the country. This will lead to a new round of debilitating confrontation between the government and the opposition, further deepening the current economic crisis.