What happens when you put accountants and commercial bankers in charge of the finance ministry instead of trained economists? Well, the budget becomes mostly a general ledger exercise where they try to play the same old numbers game and try to keep the books in balance, while complying with the International Monetary Fund conditionalities. By and large, this year was no different, where the status quo was maintained, notwithstanding the symbolic relief to the salaried class.

But beneath the main line items of revenue and expenditure lie changes too small for the headlines but substantial enough to change the landscape of an entire industry. This year, e-commerce became the (un)lucky subject, as the government has proposed a series of ‘reforms’ aimed at tightening tax compliance within the sector.

On paper, this should be a welcome move. E-commerce has grown rapidly, with estimates putting its size in the $7-8 billion range, and bringing it under the tax net is a logical step. Yet the way the government has chosen to go about it reveals a flawed understanding of the industry’s structure and a concerning disregard........

© Dawn Business