The new government urged to impose additional taxes on unnecessary imports – Research Snipers

The new government urged to impose additional taxes on unnecessary imports

imports

Pakistan needs $9.25 billion to repay the debt payments during the current fiscal year which is quite a challenge for the current government. The amount needed for debt repayments is almost equal to the forex reserves held by the State Bank of Pakistan, the Islamabad Chamber of Small Traders ICST said in a statement on Sunday.

Pakistan needs to pay close attention to imports the minor negligence can take the trade deficit to new heights to $25 billion which could be very difficult for the government to manage, said Shahid Rasheed Butt, Patron Islamabad Chamber of Small Traders.

He also said that increasing interest rates would be a hard decision as it could choke the trading activity which is crucial for the economy. Mr. Shahid said that already tested formula for controlling trade deficit is to cut on developmental spending, but there is another option for the government to add up the slab of 20 percent to 30 percent on imports.

He also said that increasing income tax is not an ideal option as it would ignite evasion and corruption, the former government has already burdened taxpayers with over one trillion rupees. The new government should squeeze in its reform agenda without considering opposition, the government should only consider the country’s economy and businesses growth, he added.

Mr. Shahid’s suggestion is pretty viable for Pakistan to put heavy taxes on unnecessary imports, the products which have substitutes in Pakistan should not be imported to the country as it only creates an imbalance in trade and widens trade deficit.