Did You Know that the Government Drops New Gas Price Bombs?
On 24 October 2023, the Pakistani government dropped a gas bomb after raising the tariff on certain policies up to 193%. This action has been taken with the aim of increasing revenues and helping reduce inflation in the country.
What will happen after increasing the prices of gas?
The government had declared that with this massive increase in tariffs, the total revenue raised would be Rs1.3 trillion. This amount will come from taxes on tobacco, gas, and electricity, along with other services. While this increase has been welcomed by some. Many people feel that it will result in a further burden on the already stretched pockets of the people, particularly those who are from lower income brackets.
Reasons behind increasing the prices of gas
The major reason for hiking the taxes is to address the widening deficit that Pakistan is facing. This deficit is largely attributed to the increase in government expenditure. It has taken place over the past few years. The government has been attempting to address the issue. By introducing measures such as increasing the taxes on imports and introducing tax amnesty schemes. Even these have not been enough to bring the deficit down. As a result, the government had to resort to a hike in taxes to fill the deficit.
Reactions of People to the New Policies
While some have welcomed the move, others feel that the move is unfairly punishing the lower-income groups. This is because they will be hit harder by the increase in taxes and tariffs than the wealthier groups. Those people can afford to absorb the additional cost. Similarly, businesses and traders are also worried that the additional taxes will lead to further decreases in profits, which could further worsen the current economic businesses.
In conclusion, the hike in taxes and tariffs is a major blow to the people of Pakistan. Especially to those who are from lower-income backgrounds. The government must ensure that the tax hike is implemented with a sense of caution, in order to ensure that the burden is not borne solely by the lower-income groups and that the issue of inflation is brought to a minimum.