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May 31, 2016 / khawjaimtiazalam

Discrimination in Taxation

Discrimination as is described in the Cambridge Dictionary stands for “Treating a person or particular group of people differently, especially in a worse way from the way in which you treat other people, because of their skin colour, sex, sexuality, etc”.

HR Groups are particular active in voicing their thoughts against Gender Discrimination. However,In Pakistan we are silent in voicing are views in  the Discrimination in  Taxation( Income Tax)which  is so Abominable that it deprives the Govt of Pakistan Billions of Rupees every year and serves  as  a Tax haven for the rich. and yet, year in and year out ,we continue to adopt the same taxation laws.

For the poor salaried class a minimum level of earning is specified (400,000.00 per annum) which changes from year to year on which the downtrodden cash starved citizen has to pay his tax and is automatically deducted from his salary.

On the other hand all & sundry who are earning through Manufacturing , Agriculture, Banks, Retail , Housing including the Panwala & Reriwala etc are averse to paying taxes or it is manipulated through Chartered Accountants, Income tax Lawyers and above all by Quid  pro quo with the Tax Authorities.Some just do not pay even if they fall in the above bracket. For the business class it is a win win situation all the time.

The Nation has entrusted the task of the collection of taxes to the FBR( Federal Bureau of Revenue) the Apex Authority. Since Independence its viability & performance is highly debatable. The erstwhile Finance Minister Mehboob ul Haq (late) once remarked that if 50% of the taxes are collected we need not go to the WB & IMF. Dilemma

The Tax laws are discriminatory as it does not Tax the Agri sector which could bring in a major return. It is not taxed on its total earnings per year but based on a different parity. Tax Holidays given to industrialist which is again not required as they can pay once they start making profit. To exempt for 3-5 years even when they are profiting is pure discrimination as compared to the salaried class.

The Dilemma which we face is that the Collection of taxes is poor and those who need to pay tax are not in the tax net. There is no effective system in place to bring them in the tax net.

It is time we kicked the begging bowl and are not in the category where “Beggars can’t be choosers” which deprives us of our Sovereign Status.

We as a Nation must raise our voice to this Discrimination and Inconsistencies in our taxation Policy.

a. Provide a level field to all tax payers. All earning above the minimum limit as for salaried class must be taxed.

b. All earnings on Gross Income. No allowances to be deductible.

c. No Tax Holidays.

d. Tax bracket & Tax on each bracket to be revised pragmatically.

I can assure that if there is awill there is away. We will certainly not have to ask for dole outs from any one In Sha allah.

Lt Col Imtiaz alam (retd)

 

 

 

 

 

 

 

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