Former SBP governor suggests uniform income tax

Ishrat Husain calls for tightening rules for mutual funds.

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.