Business

Former SBP governor suggests uniform income tax

Ishrat Husain calls for tightening rules for mutual funds.

Express April 26, 2011

KARACHI:

State Bank of Pakistan’s former governor Dr Ishrat Husain has called on the government to take tough economic decisions, bring new sectors into the tax net and levy a uniform income tax rate on all sources of income.

Speaking to the media at a discussion forum on the mutual fund industry, organised by Dawood Capital Management at its head office on Monday, Husain said that the government should prioritise the energy sector and allocate more funds for its development to provide much-needed power and gas to the industry.

Husain said that the mutual fund industry should be regulated and called on the Securities and Exchange Commission of Pakistan (SECP) to further tighten rules for the industry. “There is a great scope in the mutual fund sector,” he added.

He said that public sector enterprises, such as steel mills, must be privatised to allow the government to save Rs300 billion, which was spent on these organisations annually.

Replying to a question, he said that targeted subsidies like the Benazir Income Support Programme were a positive step because of the need to support the poorest of the poor.

“Anyone who is earning Rs30,000 annually should be taxed equally irrespective of the source of income whether he or she works in services, manufacturing or agriculture sector,” he suggested.

He said that middlemen in rural areas should also come under the tax net, just as the middlemen in urban areas were paying income tax.

Published in The Express Tribune, April 26^th, 2011.

COMMENTS (5)

Adeel | 13 years ago | Reply @Meekal...how were the economic conditions when he was Gov SBP...dont be negative for sake of it!

Muntazar Bashir | 13 years ago | Reply The principle that everybody earning in excess of Rs 300,000 per annum be taxed uniformly accross all segments of economic activity must be supported

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Meekal Ahmed | 13 years ago | Reply What did he recommend when he was Governor? It is all very well and safe to pontificate now.

Narejo, Abdul Rasheed | 13 years ago | Reply i think he meant 300,000. he has been misquoted

naushad | 13 years ago | Reply I feel, taxing income of rs. 30000 per annum, as suggested by Dr. Hussain,, would be unjust in a country like pak, as, such tax payers, will be earning rs. 2500 pm, Is it possible to meet both ends with this meagre income or rs. 2500 per month or it is just intended to sacrifice for the sacred cause of national economy that whatever one earns (especially belonging to the middle poor class)t, must be paid in income tax, as most of the elite class are either exempted from payment of tax on their income or are the tax evaders ?, Moreover, when we are listening/reading top stories of plundering of national exchequer everyday by the big bosses, is it a suitable advice from ex-governor to tax income of Rs. 30000. I think there is some misreporting in this case. Moreover, Dr..Hussain sb, with due respect, must be knowing that it is the only salary class who pays tax, as such, widening of tax net is the need of the day, yet without further burden on the already depressed salary class poors, who with fixed salary, are required to pay more due to increasing prices of daily use, yet, at the same time, paying tax on marginal increase in their salaries.

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