LAHORE: The realistic and painful measures taken by the government have the support of all major trade associations, welcome change in their attitude as these measures may hurt their businesses but are in national interest.
All major trade associations realised that the state is not in a position to bear the brunt of wasteful subsidies.
Had it continued with these subsidies, the economy would have caved in not in months but in weeks.
There was uncertainty in the market as the danger of default loomed large. Importers were never sure of the cost of their imports as the rupee was slipping against the dollar daily.
Foreign exchange reserves that could be used to finance imports had almost depleted. The cosmetic reserves deposited by friendly countries could not be used to support import.
Central bank was constrained to increase the policy rates to stem the fall of rupee. All these measures in normal circumstances would have invited strong protests from businesses.
Realisation among businessmen in general that the country is in trouble is a good omen for the economy. Ban on the import of luxury items, the increase in petroleum product rates, increase in policy rates are just the right measures that were badly needed. But a lot needs to be done.
These measures would hurt the common man more than the elite. There is a need to tighten belts against vested interests.
All exemptions and concessions should be immediately withdrawn. We are a poor nation, and our rulers should live modestly.
The British prime minister lives in a modest two-bedroom flat.
The Japanese prime minister is entitled to live in a three-bedroom old house not renovated in the last 75 years. If he chooses to live in a private residence, he must arrange his own security.
In Pakistan, the former prime minister lived in his private mansion. The security and logistics to the prime minister house were the responsibility of the state.
The former prime minister Nawaz Sharif lived in Islamabad, but his luxurious residence at Lahore was also declared PM house as he used to spend the weekend in that house.
Bilawal House in Karachi was declared PM house when Benazir was the PM. Can a poor nation afford these luxuries?
The stock market player must pay income tax on the gains they make on stocks in a fiscal year. Many of them are billionaires many times over but pay nominal taxes.
Property tycoons moving around in private jets must pay income tax on their real income. Only a maximum of 1000 yards house used by a family should be exempted from all taxes and money trail.
All additional houses, flats, plazas, and office buildings must be subject to income tax based on income generated and owners must be asked to give the money trail. All cars above 1300cc must pay not only the provincial road tax but a heavy monthly tax to the federal government.
Shopkeepers doing business on shop rent must pay at least twice the monthly rent as income tax. Currently, 60 percent do not pay any tax at all.
The last and the most difficult decision is to tax agricultural income the same way all other incomes are taxed.
The NGOs must also pay tax on the funds they collect. Government may use the tax collected from NGOs for targeted subsidies. All unconditional subsidies must be withdrawn, and only conditional or targeted subsidies should be given.
The measures taken by the present government would only stop the rot temporarily, we need to go deeper to embark on a sustainable growth path.