Budget 2k19 – Restricting Non-Filers From Buying Properties ‘Good’ Or ‘Bad’?
Presenting the budget and getting it passed through the National Assembly is one of the tiring tasks for any government. Especially in a country like Pakistan, which is already floating on foreign loans; presenting a budget that is both acceptable to the business community and to the local people is indeed very tough.
Among the many salient features of 2019 budget, I have highlighted the one that deserves everyone attention. Every bill, law, or reform has its own benefits and consequences. As per the claims of the government officials, the difficult decisions are taken to uplift the declining economy.
To understand this, you need to know what actually a non-filer is:
The broadly accepted definition of a Non-Filer is; “A Person or a Corporate who doesn’t file a tax return under a required deadline is considered as Non-Filers.” They are subjected to penalties and different punishments in the developed nations.
In easier words, Non-Filers holds untaxed wealth, which however, is not necessarily criminal.
- The legal heirs acquiring property through inheritance will not be affected under this law. That means if you are getting a property through inheritance, you can transfer it to your name even if you are a NON-Filer.
- Moreover, Non-Filers can buy Agriculture Tractors, bikes (less than 200cc), Motor-Cycle Rakshaws, and vehicles of less than 200cc.
Benefits of restricting Non-Filers from obtaining properties
- In a country like Pakistan, there is an immense need of broadening the tax net in order to get out of its humongous debt. According to the official survey, only 1 out of 100 Pakistanis pay taxes, while the rest don’t. According to the 2013 survey by the international development committee, only 0.5% of Pakistanis pay their taxes. The tax net has increased to 1% in this current year 2019. Therefore, the restriction for non-filers is solely done to increase the tax net.
- Looking closely into this law, the measure is by far understandably to target the undocumented rich elites who owned large amount of wealth. This will force them to include their assets in the tax net.
- What happens when the wealthy people don’t pay their taxes? We all know that. The success of this law might result in a rapid relief for poor; especially it will help the government to reduce inflation and work on other important projects including infrastructure, power generation, dams etc.
- It will help boost the currency and will reduce corruption by a much larger extent. However, the results are long-term.
The Negative Impacts Of Restricting Non-Filers
- The automobiles sales will decrease as non-filers, who are large in number, won’t be able to purchase any vehicle. This is one of the reasons that Suzuki suffered a huge loss within the first fiscal year of PTI.
- The consumers will have to bear hefty premiums as dealers will certainly take advantage of this law. It will highly effect the purchasing power of the buyers – these are the people who have saved for years to purchase a car.
- The slowdown in the automobile industry will lower the product and might result in companies closure that will result in massive unemployment.
- Housing will largely be impacted. Though this move is solely to target the rich, possible the criminals, however, the decrease of construction will adversely impact the GDP, and unemployment. In short, the labors are going to suffer.
Keeping in mind the tanked economy, uncontrollable inflation, decline of the real state sector, High prices of petrol; whether the ban on Non-Filers may extent the country’s tax net or it will adversely affect the country’s economy, is OPEN TO QUESTION!
The Author is Pakistani based politics analyst specializes in the relation between Pakistan and India. The writer is an undergrad currently studying computer Science from Iqra University. By profession, he is serving as a Seo Executive at the leading digital Agency “MWM Studioz.”