Six Million People in Pakistan Likely To Fall Into Poverty, TJCP Launches Statement on National Budget 2019-2020

LAHORE: Members of Tax Justice Coalition of Pakistan (TJCP) holding a press conference during the launch of statement on National Budget 2019-2020
By: News Desk

LAHORE: Seeing the federal budget through pro-poor lens Tax Justice Coalition of Pakistan (TJCP) issues its yearly statement during a press conference in Lahore. “Economist offer bleak forecast; unemployment is expected to reach 8.3% in 2021 and another six million people could fall into the poverty”, talking to the media, the Chair of TJCP and Executive Director of Chanan Development Association (CDA), Mr. Muhammad Shahzad Khan stated.

 “The civil society statement on the federal annual budget includes the voices of citizens and amplify their concerns on the budget impact. The statement document scrutinizes the key features of budget with pro-poor lens to see if and how the budget is responding to the needs of ordinary people and whether the government’s measures for revenue generation are progressive or regressive”, he added.

The Statement on National Budget 2019-2020 booklet is covering the different phenomenon of federal budget and its consequences, which will be borne by general public of Pakistan. As per the statement, total outlay of budget 2019-20 is 7.036 trillion, which is 34% higher than last year and 67% of it goes to debt and defense. 39% of budget financing is through foreign borrowing and grants.

This year growth forecast is 2.4% compared with 3.3% of last year. Tax target set at Rs. 5.55 trillion, which is 1.5 trillion higher than the previous year. Additional taxes of Rs. 560 billion levied to meet with budgetary deficit. 30% of additional revenue targeted from income taxes, out of which 70% is targeted from indirect taxes. These measures will widen the gap between rich and the poor in the society, which is ultimately a journey towards to inequality society.

Mr. Shahzad also stated, “In the budget 2019-20, Tax relief measure of 3.7 billion is announced, which is lowest in decade. No new corporate taxes is implemented, however, relief given in past to salaried class has been withdrawn. Due to additional taxes/duties, prices of daily-used items, such as prices of edible oils, ghee and cooking oil are set to increase due to 17% FED, which government has imposed by abolishing the Rs. 1/kg tax. The inflation has increased to 10.34%.”

Mr. Fsahat Ul Hassan (Member Fight Inequality Youth Alliance (FIYA) and TJCP) and CEO of Youth Advocacy Network said that the “Ministry of National Health Services receives budget of 13 billion, half of the past year. Ministry of Education receives a cut of 20%, whereas Higher Education Commission (HEC) receives a cut of 50 % in their annual budgets. Public sector development program faces budget cut of 24%”. “We have seen the inequality is coming through policy choices, education is the only light in the life of the poor, which give them the courage to come out of poverty by providing education to their children”, he added.

Other speakers including Mr. Mobeen Ahmed (Indus Consortium, member of TJCP) and Sehrish Naz (Member FIYA) shared that with these facts the biggest tax burden falls on the poor and on working people, whose tax slabs have been revised upwards. These groups will also feel the worst effects of indirect taxes, with the resulting price hikes in food, medicine and other essentials. Costs of fuel, gas and electricity has risen, as per the agreement with IMF, while 35% currency devaluation is set to further erode citizen’s purchasing power.

“Debt servicing is eating up major chunk of the budget, each Pakistani is currently indebted with Rs. 164,922 and currently total public debt to GDP ratio is at 74.2%”, they added.

Tax Justice Coalition Pakistan is an independent coalition of civil society organizations from across Pakistan, launched a statement on National Budget 2019-2020 in a press conference at Lahore Press Club.