KARACHI, May 28: Besides other factors, the rapidly rising POL prices are instrumental in raising the cost of production of all goods and services. That in turn pushed the prices up and with it the cost of living.

The worst-hit segment of the society is the fixed income group or salaried class because they could not increase or adjust their income with rise in POL prices. They had been surviving by making adjustments in budget.

Dr Ashfaq H Khan, Director-General of debt office, Ministry of Finance, the other day said on a private TV channel that the government was going to enhance the salary of government employees by around 25 per cent in the next budget to help them face the increasing cost of living.

While responding to a question, he said that government could not ask the private sector to increase the pay of their employees who, what he said, generally drew higher salaries than government employees.

The anchor person said that this would mean that only 20 per cent of the employees in the country would benefit, whereas the remaining 80 per cent in the private sector would not be getting any relief from the ever-rising cost of living.

Surprisingly, the adviser showed little concern for the private sector employees and brushed aside the issue by saying, “the government cannot ask the private sector employers to revise their wage structure.”

A simple question one would like to put to Dr Ashfaque is that if the government can collect income and other taxes from this segment of the society which contributes towards the development of the country much more than any other then why the government cannot protect their interests.

Secondly, if the Central Board of Revenue can frame laws for collecting tax from private sector employees then why it cannot provide them relief by relaxing some of the sections of the Income Tax Ordinance 2002. The salary ‘received’ by a taxpayer is liable to tax under section 12 of the Income Tax Ordinance, 2001. The value of perquisites, allowances and benefits are taxed under section 13 of the Income Tax Ordinance 2001 read with Income Tax Rules, 2002.

If Dr Ashfaq takes some pain and woes through these sections of income tax ordinances he shall find some of the formulas in the prescribed rules irrelevant. Because, when these rules were framed in 1982, the POL prices and bus fares were very low as compared to the current high cost of POL and bus fares.

The petrol price in 1982 was Rs5.05 per litre, while diesel rate was Rs3.15 per litre. Now these have gone up to Rs45.61 and Rs29.14, thereby showing a rise of 803 and 825 per cent. If we reduce the period to 1990, when petrol price was at around Rs14 and diesel at around Rs11 per litre again we will find they have risen by 226 and 165 per cent.

As the CBR has fixed a non-taxable allowance of Rs3,600 for conveyance under section 10 of the Income Tax Rules, 1982, and carried the same amount (Rs3,600) under section 6 of the Income Tax Ordinance, 2002, it shows that these government functionaries do not even know what runs the transportation system. Even an ordinary man knows it is the POL prices which determine the cost of conveyance or transportation.

By using public transport for reaching office or work place and back to his home, a common man spends Rs40 to Rs50 daily on an average on transport fare. If the average amount is multiplied by average working day in a year (Rs40x300 days) the amount of fare in a year comes to Rs12,000, whereas the present limit prescribed in section 6 is Rs3,600 which is obviously illogical and irrelevant.

In other words, a private sector employee also spend much more on his daily movement from his residence to work place as the POL prices have gone up by 800 per cent but our economic managers feel they do not deserve any relief.

It is recommened that like house rent which is progressive in nature with the basic salary the conveyance allowance should also be made progressive and fixed at 20 per cent of the basic salary so that some relief is given to the salaried class. By improving the buying power it will only benefit the economy and the industry of the country as it would trigger more business activity in the country.