Wednesday, March 16, 2011

Mini-Budget: Taxing The Already Taxed



  Mini-Budget: Taxing The Already Taxed
 
Pakistan faces unprecedented budget deficit of almost Rs 1400 billion and debt burden on the country has almost been doubled to more than Rs 11000 billion during last three years, with high double digit inflation, stagnant growth and energy crisis, which is addding to the problems of the industrial sector. Robust increase in cotton and textile prices in the international market helped Pakistan to earn a good value of its exports, but tax revenues have fallen.
 
In this troubling situation, Pakistan needs corrective measures. Majority of the members of Parliament, Prime Minister and heads of different political parties, including Nawaz Sharif, Shehbaz Sharif, Asfandyar Wali and Maulana Fazalur Rehman filed ZERO TAX returns with the election commission in 2008. How they can expect a sacrifice from people?
 
The best options:
 
a) Across the board 15 percent Value Added Tax (VAT), with zero rating on export sectors
b) Withdraw all income tax exemption
c) Resumption of Wealth Tax
d) Robust system of Urban Property Tax
e) Capital Gains Tax on  Real Estate, plus CVT on any plot transaction
f) Declare all Benami Properties illegal, and seize all such properties
g) Publish Tax Payers Directory, including names of members of parliament, leaders of political parties, top civil and military officials and owners of major media houses

 
It is unfair to tax those who were already paying their taxes.
 
Focusing on electricity tariff increase is also wrong. With 25 percent line losses in Wapda and 40 percent of KESC, no amount of tariff increase is going to be enough to make up for these losses.
 
Increase in excise duty on imported finished goods is ok, but why adding burden on local products.

 
 
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