Income Tax Surcharge @ 10% to be introduced

Arshad — Fri, 17 Sep 2010 06:03:40 +0000

The Government of Pakistan has committed to introduce temporarily 10% Income Tax Surcharge to help cap budget deficit upto 4% of GDP.

Eid ul Fitre

Arshad — Thu, 09 Sep 2010 06:31:04 +0000

HAPPY EID UL FITRE TO ALL MUSLIMS OF THE WORLD

Flood Tax

Arshad — Thu, 09 Sep 2010 06:18:31 +0000

The President of Pakistan has suggested the provincial governments to levy another tax called “flood tax” on owners of houses having area of 500 sq. yards or more.
The stated intention is to help the flood affectees. However, the proposal is not feasible on the following grounds:

i. There are already two taxes on such immovable properties. They are CVT [at the time of purchase]
and property tax [annual tax]. To impose another tax is not would put extra and in some cases very
harsh burden [e.g where two or three small families live in 500 sq yard house in a joint family system.]

ii. According to the constitution, property taxes are levied for the development of locality in which they
are collected. To collect a tax like it for flood effectees would not stand test of judicial scrutiny.

iii. The corruption in the tax system will eat away much of it as is being done in the case of ‘property
tax’.

It is dilemma that the tax policies are not framed by taking into account the existing socio-economic systems and are copied from theWest or on the suggestion of the donor agencies. The previous government abolished wealth tax which was a direct tax on the rich. The other day I was listening to a former President of the ICAP who said it was not a good tax as its collection cost was more than its collection. His remarks were sufficient to prove how the ‘higher ups’ in the society, be they like the President of Pakistan or like the ex-President of ICAP, they all want to tax the poor and avoid taxing the rich or their rich clients. He was unable to give any data in support of his so called “expert remarks”.
The influential class always favours sales tax and value tax but rejects any suggestion about wealth tax. Why? Because it has beem amassed through illegal and black money by the politicians, bureaucrats, Generals, Journalists and Judes alike. They do not want to be exposed to the public.
It is proposed that wealth tax should be revived with the following modifications:

i. There should be no tax on business capital[as it used to be in the repealed wealth tax]
ii. The wealth tax paid should be adjustable against income tax liability.

The above modifications will remove ill effects of wealth tax on business growth and prevent double taxation. However, it will help to increase tax base and dig out cases of concealment of assets created out of untaxed earnings.
Taxation system should be improved so that we do not need to look to others for help or rush to haphazard measures like ‘flood tax’.

Pakistan Law Associates

Income Tax Surcharge @ 10% to be introduced

Eid ul Fitre

Flood Tax