ISLAMABAD: The Muttahida Qaumi Movement-Pakistan (MQM-P) has asked the government to withdraw certain taxes, including petroleum levy, in the upcoming budget besides announcing administrative measures to maintain prices.

Presenting the shadow budget for 2017-18 on Wednesday, MQM-P leader Dr Farooq Sattar said the country needed to get away from its dependence on foreign and local loans because political autonomy could not be achieved without economic independence.

“To increase the tax base, simple measures should be taken, such as taxing the agricultural sector by amending the Constitution and shifting this responsibility from provinces to the federal government,” he said.

The agricultural sector contributed 21 per cent to GDP but the tax received from this sector was around 1pc of the total tax collection, he said.

However, he added that agriculture tax should be imposed on income of more than Rs1 million so that small farmers do not take a hit.

MQM was the first political party in the country that started presenting shadow budgets of the federal government. The current one is its fifth shadow budget, though the party has been divided into two factions — Dr Sattar-led MQM-Pakistan and MQM-London.

MQM-P has urged the government to cut sales tax to 9pc from 17pc to reduce the burden on ordinary citizens and facilitate the private sector, mainly small and medium enterprises (SMEs). Besides, the budget should be simple and clear, Dr Sattar said.

“The policies of the incumbent government are not only vague but flawed as they have taken too much foreign and domestic loans. And there is no let-up in energy crises,” he said. “We cannot run the government through loans. This policy has also deprived the private sector of much-needed capital.”

The party also suggested that local governments should be strengthened so that they could generate their own resources and promote economic activities at local level.

The shadow budget also proposed to limit defence budget to Rs962 billion compared to the government’s expectation of Rs995bn, and restrict subsidies and federal government expenditures to Rs659bn and Rs395bn.

The document said that higher economic growth would eventually reduce the dependence on subsidies while government expenditures could be reduced by eradicating unnecessary expenditures.

Published in Dawn, May 25th, 2017