A country where everyone pays tax..!

Mr. PM every Pakistani is paying tax

Dear Mr. Imran Khan,

AoA.

Sir,

It really hurts when our rulers, ministry of finance bureaucracy and few media persons say our people don’t pay taxes.

Even, in your speech on 20 August 2018 you said that only eight lac people pay taxes, which figure is obviously not correct, because even the number of tax filers are above one million. Yet, again in your senate speech of 27 August 2018 the media reports about you saying that we are also among countries that pay the least amount of tax.

However, the fact is that each and every item except AIR is taxed in Pakistan, which means that entire population of about 22 Crore pays tax in our country. Yes, certain VIP’s receive tax free salaries and also the Independent Power Producers (IPP’s) are allowed tax free income in Pakistan.

Just one example will explain my view point that there are over 12 Crore cell phone users in Pakistan; and each one of them pay tax while using the cell phone. The irony is that this WHT paid by the cell phone users in hundreds of billions of Rupees becomes the income of the TELCOS; as they seldom deposit this huge tax collection with the government.

Even today it was reported by the media that one Airline company has not paid to the government Rs.130 Crore tax it collected from the traveling public and CAA has suggested to put the name of its owners on the ECL.

Sir, since the With Holding Tax was imposed in Pakistan, it caused two way negative impact on the economy. Firstly, it enhanced the prices of almost every item in Pakistan and secondly, it opened huge vistas of corruption for the traders/businessmen/industrialists and bureaucracy in the country.

Now, it is said that our tax to GDP ratio is around 10-12 percent, which is the lowest in the region and the world, as well.

But the fact is that our black economy is bigger than our white economy, in which our people are paying WHT and bribes etc., which amount is almost double than the current tax collection of about Rs.4000 Crore or $40 billion. If someone wants proof of my this estimate, I will refer to the news item published on 17 April 2018 reporting that the Auditor General of Pakistan (AGP), Javaid Jahangir, has claimed that during the audit year 2017-18 auditors pointed out irregularities amounting to Rs8.276 trillion or about $80 billion in the accounts of the federal government. Link:- https://www.google.com.pk/amp/s/www.dawn.com/news/amp/1402111

If irregularities are almost double than the amount of our budget; the level of corruption or black economy can be easily estimated by even a lay man.

Now, the mother of all the financial corruption and taxation problems in Pakistan is the regime of taxation in which over 85% taxation is INDIRECT and less than 15% taxation is DIRECT, plus the scheme of WHT which can be called as one of the biggest source of corruption in the country. Here please note that corruption can not be made unless and until money is taken out of the pocket (in the name of taxes) of the public.

As such, kindly, instead of blaming the public for not paying the taxes, which in fact, even the dweller of Jhuggi is paying, the issues highlighted above of high indirect taxation, tax relief to the VIP’s and certain industries/businesses etc., and the MASSIVE misuse of WHT should be resolved in an intelligent and smart manner. May be the WHT should be withdrawn, altogether considering that world was a better place to live, before the advent of the WHT.

Best Regards,

Syed Nayyar Uddin Ahmad