The federal budget for the financial year 2019-20 is finally out of the bag. Announced under circumstance when the cash strapped PTI government already had announced about four tax adjustments/ mini budgets during the FY 19, it was generally thought that the budget would be oppressive in nature with pressure on the indirect tax regime; which usually translates into the common man and the poor man paying for much of the revenue accrued by the government.
However, alarmed by what can be called rising prices and the general downward trend in the standard of living of the common Pakistani, the PTI government kept it on the low burner and resorted to selective taxation. The taxation thrust was deliberately kept on the areas where the target consumer was the rich people and sections of society. The common man was taxed but not to the oppressive extent; a practice usually witnessed in the finance bills when the government were usually finalizing programs with the IMF.
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There were many exemptions too in the budget, which demonstrated that the economic managers were trying to undo the damage done by faulty taxation proposals during the last many mini budgets. One such step was the removal of the non-filer ban on property/ real estate transactions. The economic managers generally thought that the pressure on being a filer would prompt the investors to go for being included in the tax net. On the contrary the property market shrunk to the point of being in the state of near halt. That single step can impact on the property market in the next few months, provided the needed political stability is here to sustain the positive step on part of the economic managers.
The ICT sector and the telecom sector being the other growth cluster of the economy; having bore more than the warranted damage during the last few mini budgets in the name of rationalization of the taxation regime on mobile devices, was awarded with 3 per cent relief in the import tax. That step again can demonstrate its positive impact in the coming months.
Conclusively the federal budget much feared for certain reasons was a mixed bag of pleasant surprises pointing out the harsh fact that political realities in the end forced the government to desist from taking unpopular decisions in the budget.