Increasing inflation

August 20, 2019

It is true that the government desperately needs money, which comes from taxes, and wants to curb spending to fight the twin deficits i.e. trade and budgetary losses that steered the economy towards a default. Simply put, people are looking at another difficult year because of several new taxes and policy measures that have not only created inflationary pressures but also slowed down economic growth and keeping the job market under pressure. The budget for FY2019-2020 saw an increase in both direct and indirect taxes. On one hand, disposable income has shrunk while on the other people’s purchases are costing more. From tea to favorite desserts, everything that uses sugar has become more expensive as the price of sugar has increased following an increase in sales tax. Similarly, processed food like meat, chicken, fish and cooked and semi-cooked meals have 17% sales tax imposed on them. The government believes these items are usually consumed by people who are financially well off. Those who like to have a cold drink with their meal are paying a bit more as the duty on carbonated drinks has increased. The purpose is to discourage the consumption of sugary drinks, according to the government. It has also imposed duty on non-aerated drinks like syrups and squash juices. And only if somebody thinks that he won’t be affected because he doesn’t have a sweet tooth, he is wrong because other foods like fried items have also see a rise in tax. The government has abolished the per kg tax on ghee and cooking oil, but has increased the federal excise duty (FED) on these items. Amid all these difficulties people are facing, there is an alarming news that the Capital Development Authority has raised property tax and water charges in Islamabad by 150 to 200 per cent in one go, meaning thereby that a person who paid Rs10, 000 as property tax last year will now pay Rs30, 000 and the same goes for water charges. Amazingly, heavy taxes are being imposed. Nobody bothers to think, how will a person earning a small amount per day manage his living? How will poor people survive who are dependent on their daily earnings. A sharp rise in the fuel, food and transportation costs has severely hit the domestic budgets of people. Everything has become expensive. Inflation has reached where it is impossible for the common man to survive. The petrol prices, packet of flour, the price of sugar has skyrocketed. Unfortunately, there has been no progress when it comes to employment rather countless have lost jobs. The authorities should keep in mind the people’s problems while making any decision to impose further taxes despite prevailing economic realities.

Inflation has reached where it is impossible for the common man to survive. The petrol prices, packet of flour, the price of sugar has skyrocketed.