Thursday, July 1, 2010

Bravo: What a Beautiful Budget!

One must applaud our government's inherent ability to pull off the absolutely fantastical; Miraculously that uneducated lot (or the IMF) have constructed a budget worthy of our great nation. What a feat! Victory to Democracy! Revenge Rocks and all that!

Here are some of the salient features that I’m particularly impressed by:

Weed-Cigarette price equivalence policies: One may infer that the massive increase in tobacco taxation is completely in line with the Governments long standing desire to bring Drugs and Cigarettes to an equal price parity. However, I’d like to suggest that next time (assuming this government is around for a next time, future is rather uncertain), just legalize and tax Weed and say the IMF made you do it....or the Zionists. Trust me, you’ll make a lot more than the Rs. 30bn increase you have slated now. (Note: The Pakistani Youth may get around the tax increase by smoking their tobacco without filter rods: We do not wish to theorize how they gained their joint rolling skills). The 5% cut in imported drugs (pharmaceuticals) is truly broad minded as well. Bravo you Liberal Lot!

Go VAT!: October 1st...ish. We'll see…(That’ll teach the IMF from telling us what to do), notably the last Prime Minister that implemented a comprehensive sales tax was ahem…relieved of Office by the “Military Protectorate”.

Capital Gains Tax: Terrific, let's drive out our local small investors and the foreign investors that were attracted to our market in the first place because of our relative cheapness. Say good bye to the Brokerage business. So, where are you going to make up their Tax Revenue shortfall....and all this for an expected Rs. 5bn in Tax revenue? Short sighted much?

Minimum Wage Increase: Brilliant move by the Government, bravo. I expect all government workers are excited by these proposed increases. Now if the government were able to do something like 'enforcement' this may have some impact on the wider economy. Oh, and by the way, when you increase the minimum tend to increase unemployment. Aren't we lucky that the government doesn't collect Unemployment data? It could be potentially embarrassing you know. 

Income Tax Exemption Increases: Sweet. Now how about growing the economy and ensuring that people actually have an income in the first place. That would be incredibly sweet of you.  

Turnover Tax on Loss Making Companies increase from 0.5% to 1%: Yeah, let's bankrupt our Fuel's not like they are important. And hey, I'm fairly ambivalent towards my cell phone usage too....

Withholding tax of 5% on Air Travel: Why are we putting a Tax on domestic travel versus International? Is there a vendetta against moving around in Pakistan? Is the government trying to encourage people to use Pakistan Railways....

9.5% Inflation Target: With the 1% increase in GST, new taxes, further tariff increases due to cuts in subsidies and downward sticky nature of prices.....wishful thinking much? Fingers crossed we can….adjust the numbers.

442bn for Defense: The wonderful 17% increase in our defense budget is an inspired idea. We’ll bomb our country to shreds and have the international aid agencies ‘rebuild’ it because ‘they made us do it’. At the very least they’ll ask us less about how we’re spending out PSDP funds….

Taxing Cold Air: 10% FED increase on Air Conditioners and Deep Freezers. An inspired choice I must say; so much more original than regulating the load of hot air emanating from our parliament. 

Circular Debt Crisis Resolved!: about not. still evaluating options.... Details to follow…eventually. Basically the current idea being thrown around are placing the financing burden on the big 5 Banks....because they've been sooo open to lending recently. Private Sector lending can be expected to crash even further. Good luck in meeting your growth target without ensuring sufficient credit to the Private Sector. 

All in all, this is truly a remarkable budget, encapsulating all of our hopes and dreams and providing genuine relief to the common man by…by….well, that’s in next years budget….or the one after that. 

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