Pakistan is grappling with a crisis that is squeezing the wallets of millions of citizens. The spiraling cost of living is becoming untenable, with food prices, in particular, experiencing unprecedented hikes. Only recently, the petrol price in Pakistan was raised by Rs7.45 per litre while the National Electric Power Regulatory Authority (Nepra) on Friday notified an additional fuel cost adjustment of Rs3.33 per unit, which will be shown separately in consumers’ bills “based on units billed in May 2024, and it will reflect in the billing month of July 2024”. This comes after an almost 20 per cent increase in the uniform national tariff. In another development, the prices of packaged milk and infant formula have also jacked up considerably. All of this comes along with the heavy taxes on the salaried class, which already suffered double-digit inflation in the last financial year.
That the cost of living in Pakistan is crippling the already struggling lower class and the middle classes doesn't seem to be much of a concern for our ruling elite, who are busy living their cocooned lives without taking any austerity measures while regular citizens bear the brunt of their economic policies. The issue here is not that the people were not aware of how this budget was going to be a tough one due to the upcoming IMF programme and our economic crisis, but that the government has only put the burden of taxes on those who were already taxpayers. Instead of bringing those who were not paying taxes into the tax net and working with provinces on agriculture tax and property tax, the government has mostly increased the taxes on the salaried class despite promises that they will not be burdened unnecessarily. And instead of controlling electricity theft and transmission losses, the government just increased the electricity tariff which only affects those who regularly pay their electricity bills.
So where's the relief for the common people? Well, none is coming. The government needs money to give relief to the people and money can only be raised through taxes. But just one example highlights the mess our taxation policy is. Property taxes in this country are so low that even small cities in neighbouring countries raise more property tax than an entire province here while property tycoons are getting richer by the day and other people poorer by the day. The government has to realize that the cost of living crisis is now almost unmanageable for many people who are now struggling to survive. The least the ruling elite could have done was to take some austerity and belt-tightening measures but what it did instead was raise its own salaries, get more perks, and give exemptions to the already rich and powerful. Why is it that the big landlords don’t have to pay agriculture tax or the real estate sector is not taxed as it should be or retailers are not taxed as per their income? So what should a regular citizen who has no lobby in the power quarters do? Pay through their nose every single day while working tirelessly? There will be a political cost for this in the end and this cannot be sustained for long if the ruling elite gets to play act Marie Antoinette while regular folks can't even afford milk any longer. Addressing such inflation requires a comprehensive approach that includes fiscal policy adjustments, monetary measures to control price surges, and targeted support for the most vulnerable populations. The current economic model must be recalibrated to ensure that it does not exacerbate the cost of living crisis facing millions of Pakistanis.