This goes to show, yet again, that the government lacks political will.
ISLAMABAD: This refers to a report of March 15 titled “Government dithers at economy’s expense... again” and your report of March 16 on the government’s promulgation of ordinances to levy several new taxes. This goes to show, yet again, that the government lacks political will and cannot muster courage to bring tax evaders to justice and to end the exemption from tax of income derived from agriculture.
Instead of placing the burden of income tax on all persons according to their ability to pay, the government is playing tricks with the tax regime and pretending as if the proposed flood surcharge of 15 per cent on withholding taxes will come from the pockets of taxpayers and will not affect the common man. The fact is that most of the withholding taxes on imports, contracts, sale and supplies and services are added to the cost and prices and passed on to the consumers and clients without any tax incidence on the income of importers, contractors, sellers, suppliers and service providers.
These withholding taxes thus become indirect taxes, like excise duties and sales tax, which not only adversely affect the purchasing power of consumers but also lead to price hike in the poor economy.
Jameel Bhutto
Ex-member (tax policy) CBR
Published in The Express Tribune, March 17th, 2011.
