The Senate Standing Committee on Finance, Revenue and Economic Affairs had rejected the proposal of the Federal Board of Revenue (FBR) regarding imposition of 17 percent sales tax on gold, diamond and their ornament services, and asked for measures to check their illegal imports. According to details, the committee also rejected other tax proposals of FBR including levying 17% sales tax on matches industry, sale tax on infant milk, and recommended to impose tax on imported bicycles valuing over Rs 25,000. The committee was informed that the jewelers were already paying tax at the rate of 1.5 percent on gold, diamond 2% and services 3%. According to reports, the representatives of the match industry informed the committee that they were already paying tax on input and raw material. The lawmakers accepted the proposal of the match industry and ordered the FBR to maintain the previous tax regime to promote the local industry. While an honorable Senator stressed the need for providing special incentives for infant formula milk manufacturing companies in order to end child malnutrition.
Currently, the state of Pakistan is passing through a very crucial time of its history because the country faces serious challenges in its economic survival and has reached the brink of financial default due to scarcity of liquidity in the form of foreign loan or local revenue generation. The International Monetary Fund (IMF) had handed over the government a long list of tough demands which will push the government as well as the nation into another challenge but provision of a temporary relief is imminent for survival of the country, because our financial system has become addicted of periodic aid only due to wrong priorities of the government and interference of pressure groups in the economic affairs.
Our Prime Minister, Parliamentarians and Financial experts had ever thought that why our country gets stuck to similar situation after a certain period of time and we need foreign loans to run the national affairs. The reason is very simple; it is a failure to implement an economic agenda due to various pressure groups. There are countless pressure groups in Pakistan ranging from Parliamentarians to Political Parties, Students and labour unions to departmental unions, shopkeepers to mill owners and above all relatives and families of Political leadership. All these pressure groups exert pressure on the government to secure their financial interests and demand their rights without fulfillment of obligations towards the nation. Our economic team has never accomplished its economic goals including privatization of government entities, imposition and collection of taxes and judicious development etc. The governments were compelled to pump more money into the nonprofit entities like Pakistan Steel Mills, railways, and PIA etc. while development projects had been prioritized on political basis instead of genuine public needs. The Senate Committee had listened to the arguments of the representatives of few Industries. In fact, the lawmakers must invite the people from all sectors of the economy including the public representatives/end users to get insight into the true economic condition of the public and industry. Presently, the government has prepared a mini-budget to slap massive taxation on businesses and communities to fulfill IMF demands. The influential have reached to Parliamentarians and got exemption from taxes but who will listen to the plight of the poor who can’t reach to the legislatures.