BUDGET: 2024-2025 Who should pay taxes? How much should they pay? What should we do with the money?


Many people in Pakistan found the budget speech by Finance Minister Ishaq Dar confusing. But in this budget—the first fully owned by the PML-N government—the Nawaz Administration revealed their true priorities.

Buried in the long budget documents is a clear message: we don't have a plan to fix Pakistan's big economic problems, but we'll still give benefits to our friends.

Let me explain.

A budget should answer three basic questions: Who should pay taxes? How much should they pay? What should we do with the money?

Throughout history, Pakistan has always answered these questions wrong. Instead of taxing richer people more, we often tax everyone the same. This means poorer people end up paying a bigger part of their income in taxes.

For example, let's look at cigarettes. The tax on them is paid by the companies, but it's the customers who really pay it. Poorer people end up paying a higher percentage of their income on these taxes compared to richer people.

The government prefers indirect taxes, like sales tax, because they're easier to collect. But these taxes aren't fair.

This year's budget made this problem worse by making some parts of income tax more like sales tax.

The second question is about how much tax we should pay. This can be a touchy subject. For example, mobile phone cards have a high tax rate. But if we want lower taxes on phones, the government needs to raise taxes elsewhere.

The last question is what the government should spend money on. Sadly, the government is giving less money to schools and hospitals while giving subsidies to big businesses. This makes the rich richer and the poor poorer.

The budget shows we're choosing to help the rich instead of the poor. And that's not right. If this doesn't make you angry, I don't know what will.

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