Advisor to the KP Chief Minister on Finance Muzzammil Aslam, while addressing a press conference at Pakhtunkhwa House in Islamabad, said that after the phrase “Why Was I Removed?”, another expression has become widely popular: “Why Can’t the Budget Be Finalized?” He said the federal budget has been delayed because, on one hand, the federal government has failed to achieve the revenue commitments it made to the International Monetary Fund (IMF), and on the other hand, its coalition partners are unwilling to support the government on expenditure-related matters.
Muzzammil Aslam said that during a recent meeting, the federal government asked all provinces to generate an additional Rs430 billion in tax revenues. However, provinces have limited taxation authority beyond taxes on services. In response, the discussion turned to agriculture and property taxes. The federal government presented data from the country’s four major cities, showing that the highest property tax collection was in Peshawar, followed by Karachi and Lahore. He noted that several major industrial cities were not included in the data.
He said that initially Khyber Pakhtunkhwa was asked to collect Rs35 billion in additional taxes, but after the meeting the target was increased to between Rs60 billion and Rs65 billion.
Muzzammil Aslam stated that the federal government has failed badly to meet its tax collection targets and is now talking about collecting Rs13 trillion in revenues. He added that the government is already under pressure to meet next year’s targets, and as a result, the tax burden on ordinary citizens will increase further. He pointed out that salaried individuals already pay income tax on their salaries in addition to taxes on petrol, electricity, and numerous other goods and services.
The KP Finance Adviser further said that, following IMF recommendations, the government is ending the electricity subsidy for consumers using less than 200 units per month, a move that will further increase difficulties for the general public.
Muzzammil Aslam also said that due to the Iran conflict and rising global fertilizer prices, the federal government has asked provinces to provide fertilizer subsidies in the next budget. He warned that higher fertilizer costs would eventually lead to an increase in food prices.
He added that the federal government had directed provinces to procure wheat at a rate of Rs3,500 per maund. However, none of the provinces has procured even a single grain of wheat because the market price is significantly higher. He further claimed that wheat prices are highest in Peshawar due to disruptions in supplies from Punjab and the collection of large sums of money from trucks at checkpoints.