It is crucial to focus on retaining intellectual capital through efficient taxation measures, especially when real capital is tied up in unproductive areas like real estate. The federal budget aims to increase tax revenue significantly, with ambitious targets for tax-to-GDP ratio and income tax growth.
However, the budget predominantly relies on deepening the current taxpayer base rather than expanding it to include untaxed entities. This approach may lead to further financial pressure on salaried individuals and middle-income households, negatively impacting disposable income. The sharp rise in indirect taxes, such as sales tax and Petroleum Development Levy, can further contribute to inflation.
While the budget offers hope for macroeconomic stability and private sector revitalization through planned privatization, the lack of broadening the tax base may hinder sustainable growth. By penalizing existing taxpayers and failing to encourage compliance among non-filers, the budget risks promoting informal economy practices and hampering investment-oriented goals.
In summary, the federal budget, while optimistic, needs to address issues related to tax base expansion and inflationary measures to foster a conducive environment for sustainable economic growth.
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