Someone with even the most basic knowledge of economics would know that indirect taxes are always regressive.
KARACHI: Someone with even the most basic knowledge of economics would know that indirect taxes are always regressive and fall disproportionately on the poor. If the issue is to document the economy, as is claimed by the proponents of levying the RGST, then that can be done by using a rate of one per cent rather than 17 per cent. Clearly, the aim is to expand tax collection and it seems that this is being done by taxing those who already are taxed heavily. The aim, first and foremost, should be to augment collection of direct tax and only after that is achieved should VAT or the RGST be implemented.
Jamil Khurrum
Published in The Express Tribune, November 16th, 2010.
