Dr M Ali Hamza

Taxation is the foundation of a strong economy. It funds essential services like infrastructure, education, healthcare, and security, supporting the well-being and growth of society. Paying taxes isn’t just a legal duty; it’s a shared investment in our nation’s future.The core purposes of taxation arei) creating an environment where businesses can thrive and public welfare can be supported through government revenue, ii) promoting fair wealth distribution by ensuring equal opportunities for all; a level playing field, iii) aligning with global tax standards to stay competitive in international trade, and iv) driving national development and progress.Ultimately, it is the responsibility of government decision-makers, those who design and approve the budget, to ensure the said goals are achieved through sound tax policies.

Fairness is a fundamental principle of taxation. The idea isn’t new. In The Wealth of Nations, Adam Smith introduced the Four Canons of Taxation: Equity – taxes should be fair,Certainty- taxpayers should know what to expect,Convenience- taxes should be easy to pay, andEfficiency- tax collection should not be wasteful.Modern economists like Joseph Stiglitz and Arthur Laffer have built on these ideas, focusing on how to raise government revenue while still encouraging growth and supporting public welfare.

Arthur Laffer, known for the “Laffer Curve,” presents another view. He suggests that lower tax rates can sometimes lead to higher revenue by stimulating economic activity and broadening the tax base. According to Laffer, high taxes discourage investment, work, and entrepreneurship. For countries under IMF programs like Pakistan, adopting a more growth-friendly tax policy might increase revenues without stifling the economy and compromising public welfare.

While taxation is meant to support public welfare in all economic models, the real issue lies in how policies are designed and applied. For a country like Pakistan; facing fiscal pressure and operating under IMF programs, it’s crucial to adopt smarter, fairer, and more equitable tax systems.Even the IMF emphasizes the need to protect public welfare. Do our policymakers follow this vision? Maybe, but some recent decisions suggest otherwise.

Let’s look at an example from the 2024–25 budget.The government imposed an 18% GST on packaged, safe milk, shifting it from zero-rated to fully taxed. Why was this decision made?There seem to be two main reasons. First, policymakers likely assumed that packaged milk is mainly consumed by the wealthy, making the tax progressive. However, a study by Mackenzie disproved this. It founds that 60% of packaged milk in Pakistan is consumed by households earning around PKR 50,000 per month; clearly not part of the rich class. This makes the tax regressive. Second, the government may have expected higher revenues by taxing the formal dairy sector. But the result was the opposite: sales dropped by 20%, and revenue targets weren’t met.Beyond these two misjudgements, the decision also led to other negative impactson public health, consumer trust, and the formal dairy industry, which already struggles to compete with the huge unregulated sector.

As an agriculture-based country, farmers are the economy warmers.However, the recent imposition of 18% GST on packaged milk has severely impacted them.According to a report by the Pakistan Dairy Association (PDA), over 500 milk collection centres have shut down. Instead of adding 10–15% new farmers each year, 35% of existing formal dairy farmers were forced to shift back to the unsafe and unregulated loose milk market. Meanwhile, the price of loose milk increased by PKR 30–40 per litre, but farmers had no benefit from this rise, rather the sellers (gawalas).

This tax decision also caused dairy companies to halt major investments. Around PKR 1.3 billion per year meant for farm productivity and farmer development was withdrawn. Additionally, companies had to lay off 20% of their workforce, run their plants at less than 50% capacity, and cancel PKR 400 million per year in investments aimed at converting consumers from raw to safepackaged milk.

A 2024 report by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) highlights another serious impact of the 18% tax on the formal dairy sector. After the tax was imposed, the unregulated loose milk market, controlled by milk sellers (gawalas), not farmers, gained an extra PKR 1,319 billion through unfair price hikes. Yet, the government didn’t earn a single extra rupee in tax revenue from this shift.The result? More unsafe milk flooded the market, putting public health at risk. Gawalas and shopkeepers made huge profits, while farmers suffered.

Who lost? The farmers, the consumers, the regulated dairy sector, and ultimately, the government itself.This policy undermined progress in food safety, rural livelihoods, and long-term economic development.In a country like Pakistan, with a population of 242 million and over 40% of children suffering from stunted growth due to malnutrition, taxing safe packaged milk goes against public health goals and it is also not even in line with global practices.  Safe milk be either zero taxed or should not exceed 5%.

Dairy example raises concern about, how taxes been dealt in preparation of budget. If pressure of revenue collection is superseding public welfare, we need to re-evaluate our approach. Pakistan needs to expand its tax base, improve administration, and generate sustainable revenue without harming economic growth, compromising on public health and blocking investment into regulated sector.

by Muhammad Mohsin Iqbal

There was a time when the art of “Kush’ti” wrestling held a cherished place in the hearts of the youth. It was not merely a pastime, but a noble pursuit—an emblem of strength, discipline, and honour. Young men, in the prime of their years, would engage in rigorous exercise with great zeal and pride, preparing themselves for the challenges in the “Akharra” Arena. The streets echoed with the determined footsteps of these young wrestlers, who walked their neighborhoods with chests puffed in the innocent arrogance of youth and the boldness that comes with untested strength. Often, when two such spirited souls crossed paths, their silent stares would be enough for the elders to intervene, directing them to the akharra—the arena—where strength could be proven not in words or boasts, but in action and courage.

In those contests, the skilled and powerful wrestler would dominate, tossing his opponent to the ground with clean and commanding moves. And when victory was his, he was celebrated with beating drums and songs of triumph, a true hero of the soil. The defeated, though humbled, would accept his loss as part of the game—perhaps consoling himself with schemes for a future rematch. But no amount of whispering in corners or brewing of petty plots could stain the honour of the victor, for his triumph had been earned in open combat, under the watchful eyes of all.

And now, what was once a tale of the wrestling pit seems to have come to life on the larger canvas of nations. In recent days, India has found itself in the place of the defeated wrestler—cast to the ground by Pakistan in a manner both public and undeniable. Stripped of its pride on the battlefield, it is left with no honourable avenue through which to respond. But rather than accept defeat with dignity, it has chosen the way of whispers and plots. Like the vanquished wrestler who cannot bear the sting of loss, India has turned away from the open arena and has instead embraced the shadows.

Pakistan, on the other hand, has always acted with restraint and dignity. It is a peaceful country, seeking peace and development not only for itself but for the entire region. Our intentions are rooted in cooperation, not confrontation. Yet, we are never negligent in our defense. History bears witness that we have never been the first to strike—but when the enemy crosses the line and tests our patience, we have always known how to correct his behaviour with forceful clarity. We do not raise the sword by choice, but when it is raised against us, we do not falter in its use.

Unfortunately, India’s rulers have long followed a dangerous pattern: whenever elections approach, they drag Pakistan into their political theater, weaving false dramas and fabrications to stir public emotions and win votes. This tired tactic has not only poisoned the atmosphere of the region but has also made a mockery of the idea of responsible leadership. It is high time they abandon this reckless strategy and begin to act like good neighbors rather than hostile provocateurs. They must understand that Pakistan’s hands are now untied—and if they make the mistake of provoking us again, the response will be far more decisive than before. The elders have long said that a hint is enough for the wise, but it seems that wisdom has long fled their counsel.

India, having failed in direct confrontation, now seeks to inflict harm through underhanded means—by rekindling old alliances with elements hostile to Pakistan, by sowing discord in Balochistan, and by nurturing the venom of terrorism in the very veins of our nation. These are not the acts of a noble adversary but of one who has lost both the contest and the courage to face the truth of his defeat.

Pakistan must not allow this moment of triumph to dull its senses. Indeed, now is the time for sharper vigilance and deeper unity. We must recognise that the defeated often become the most dangerous, for they carry the bitterness of loss with them, feeding on it, waiting for a moment of weakness in their adversary. India, wounded and embarrassed, will not soon forget the humiliation it has suffered. Its pride has been pierced, and it shall roam the region like an injured beast, desperate to strike, even if only in small and cowardly ways.

We must not give it that chance.

Our resolve must be steeled, our development plans guarded, and our national unity preserved. Let us not be caught off-guard in this next phase, for while the war may be over in one form, it continues in another—less visible, but equally insidious. We must look beyond the celebrations of victory and recognise the long road that still lies ahead, fraught with trials and the constant tests of our strength, our patience, and our wisdom.

The lesson from the wrestling arena is a timeless one: victory must be followed by vigilance, and strength must be tempered with foresight. As long as we remain watchful and united, the defeated may plot, but they shall never prevail. Let the drums of triumph continue to sound, not only for our victories on the field but for the steadfastness we show in the face of every storm that follows.