SITUATIONER: Putting the squeeze on everyone's income, in every sector.

THE government has finally come to terms with 'IMF-dictated' budgetary measures and increased target for revenue collection to Rs7.47 trillion for the next fiscal year with net addition of Rs466 billion worth of taxes since the June 10 original budget. It may not be a reformist budget that should have ideally expanded the tax net, but it appears set to increase tax-to-GDP ratio at least for a year with additional tax contribution by almost every sector of economy, except agriculture for obvious reasons.

The additional tax burden on almost a dozen big industries has rattled the manufacturing sector. About a 2,000-point fall in the stock market was the first spontaneous reaction to the surprise tax increase in the shape of 'super tax'. Their profits have come under further tax. At the same time, sectors like retailers, jewellers, builders, restaurants, automobile dealers - precisely the trading community that has been PML-N's political capital - have been brought under the fixed tax regime.

But this could be a good start if will is there to graduate this sector a year later to a meaningful taxation according to its tax potential. Finance Minister Miftah Ismail said the government had committed to the IMF that the primary deficit of Rs1.6tr recorded this year would not only be brought down but there would be a surplus of Rs153bn.

The high worth individuals have also come under additional tax in the shape of poverty alleviation tax. The icing on the cake was additional 'super tax' on 13 industrial sectors which are estimated to have earned more than Rs900bn in profits this year. Those bracketed under this 'super tax' include cement, steel, sugar, oil and gas, fertilisers, LNG terminals, textile, banking, automobile, cigarettes, beverages, chemicals and airlines.

Not all but some of these sectors have prospered on the back of government subsidies, protections and rent seeking. For far too long, the banking sector has enjoyed secure profits on public money through guaranteed government borrowing and owes it to the nation to give back a part of this for one year. But many of these sectors are the key sources of employment, as well. It is not yet clear if these big industries would like or be able to absorb the impact of additional tax burden or pass it on to the people and may increase the cost of living and construction for middle class.

The prices of cement and steel, for example, have already doubled in about three years. While the industry has...