According to the recently announced Income Support Levy (ISL), tax will also be applicable on pension emoluments.
LAHORE: The Federal Board of Revenue has never come up with any incentives or benefit schemes for registered taxpayers in Pakistan. I have recently retired after having paid taxes for over 40 years and received pensionable emoluments, which by law are exempted from tax. As is the practice, salaried people invest funds from pensionable emoluments in National Saving Schemes or savings schemes of banks. They pay withholding taxes on all such schemes, other than the Pensioner Benefit Fund or Bahbood Fund. However, according to the recently announced Income Support Levy (ISL), tax will also be applicable on pension emoluments invested in approved saving schemes. To make matters worse, the ISL will be applicable on already consumed profits earned during the preceding financial year ending June 30, 2013.
This makes a mockery of tax-exempted pension emoluments and will only add to the woes of thousands of pensioners, who can hardly meet their expenses given the massive inflation and rupee depreciation. In sharp contrast, the PML-N government has exempted retail traders from mandatory requirements for presenting their NICs, NTNs and residential/business address declaration apart from giving them preferential and discriminatory benefits on sales tax, in violation of the Constitution. It is an established fact that the documented economy suffers whenever the black undocumented economy is encouraged and patronised by the state. Every civilised country in the world gives benefits to taxpayers and pensioners, while in Pakistan, they are being punished, as if they have committed a grave sin by paying their taxes and becoming part of the documented economy.
Malik Tariq Ali
Published in The Express Tribune, October 4th, 2013.
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