If I’m taxing the rich, people should support me: Ishaq Dar

Published: June 13, 2013
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Finance Minister Ishaq Dar. PHOTO: AFP/ FILE

Finance Minister Ishaq Dar. PHOTO: AFP/ FILE

ISLAMABAD: If I’m taxing the affluent class in the latest budget, the people of Pakistan should support me, said Finance Minister Ishaq Dar on Thursday.

Dar was speaking to media in Islamabad, explaining the measures proposed in the budget for fiscal year 2013-14.

Clarifying the levy imposed on highest income group (annual earnings above Rs7 million), the finance minister said that Rs1.4 million paid by the group in addition to the 30% tax will be used to support the poorest of all.

“This will go in the social safety net,” he said, stressing that the additional million is not a tax.

Responding to the complaints that followed this announcement yesterday, Dar said that only around 3,000 people fall in this category. “The rich should pay this levy happily,” he added.

Below is a graph showing the various sources of revenue:

The finance minister said that the new government has taken tough decisions because the aim is to move in the right direction from the very beginning.

He said the government needs to ensure that GDP grows enough to support the swelling population.

Boasting the austerity measures taken in the latest budget, Dar said the government will save Rs40 billion because of the cuts in expenditure.

Responding to a question regarding no increase in salary of government employees, the finance minister said the state could not afford the increase and that the employees will be accommodated in next budget.

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Reader Comments (68)

  • Muzaffar
    Jun 13, 2013 - 1:56PM

    Dar Sb how is increasing GST to 17%, taxing the rich ?

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  • ahmad
    Jun 13, 2013 - 1:58PM

    u r not taxing the rich. u r taxing the middle class……..

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  • ahmer
    Jun 13, 2013 - 1:59PM

    Mr Dar, can you please explain in which category do the super rich like yourself and Nawaz shareef and shahbaz shareef fall in. Taxing the already taxed salaried class is unjustified. Tax the above super rich which dont pay taxes.

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  • frank
    Jun 13, 2013 - 2:01PM

    Dar is acting cute. Everyone knows that declared incomes in Pakistan are a complete lie. Why is he not taxing all those opulent eye-popping mansions in Islamabad and Lahore? There are more than 3000 of them! Dear Pakistanis you get the leaders you deserve.

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  • doom
    Jun 13, 2013 - 2:05PM

    I’m not sure this is a good idea. Who are these 3000 rich people? My guess is they are the relatively tax-law-abiding, corporate rich, who create capital, invest and create jobs.

    This sort of super-tax makes a bit more sense for countries like France (and even there it was controversial and drove some famous rich people to leave France) but it is especially unfair here, where a handful of existing taxpayers are expected to bear increasing liability while most people (big agriculturalists especially) pay nothing.

    I hope there are plans to work on expanding the tax net instead, for the future.Recommend

  • Javaad Ali
    Jun 13, 2013 - 2:05PM

    ALL Pakistani’s earning more than Rs. 500,000 PER YEAR should pay income tax, regardless of whether their source of income is from industry, agriculture or services.

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  • Ahsan
    Jun 13, 2013 - 2:06PM

    Oh Please spare us!!

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  • Timour
    Jun 13, 2013 - 2:09PM

    I would support you if this taxation is across the board i.e. for agriculturalists, businessmen, career politicians, professional employees and service providers such as accountants, doctors, dentists and so on.

    Unfortunately since only the salaried persons are documented, this burden falls on them disproportionately. Secondly where is this money going ? If its going to bail out PIA, Railways, Steel Mills, than that’s a waste. If its going to an audited special account for social support. I would happily support it.

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  • Sonya
    Jun 13, 2013 - 2:22PM

    How the Government subsidy of Rs 504 billion in 2013-14 taxing the rich??? Are you really a chartered accountant??

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  • GhostRider
    Jun 13, 2013 - 2:23PM

    If you are taxing rich where is non utilization tax (land) on feudals…where have you talked about taxing the stock market profits?

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  • Malik Liaquat Hussain
    Jun 13, 2013 - 2:33PM

    Expeditious reward for the PMLN voters

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  • Faisal
    Jun 13, 2013 - 2:38PM

    The only way to increase taxes in Pakistan, is to tax the already taxed salaried class!!!

    Why don’t you show some courage and announce that all parliamentarian sources of income will be checked and separately taxed?

    Why not use NADRA as an effective organization on collecting data on home owners and their sources of income?

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  • lkhan
    Jun 13, 2013 - 2:42PM

    Mr. Dar has presented a budget that ought to be hailed. Of course there will be those who denounce it, especially the rich who do not want to pay their taxes, and unfortunately for Pakistan have means for complaining as if the new policy will harm the poor instead. Mr. Dar can not increase government salaries presently due to austerity measures. The country is practically bankrupt, has huge problems, the PM and his team are taking them on sensibly it seems. They ought to be given a chance, those who care for the nation should not turn towards irrational criticism just to protect their personal interests.

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  • Yousuf Siddiqui
    Jun 13, 2013 - 2:49PM

    Increase in pensions may sound good if only they were paid on time and the gst spike will only increase price of daily comodities which are increasingly going out of a common mans reach. Tax imports of luxury items especially the imported car sector to promote the local car industry. Its high time a european manufacrurer comes in to the picture to break the japanese monopoly in this sector.

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  • Eshal
    Jun 13, 2013 - 2:51PM

    Ouch
    You are not taxing the RICH. You are taxing us, the SALARIED class as we have no other option but to see our tax deducted at source while RICH people are enjoying ALL the luxuries they have
    Sigh

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  • Bakhtiar Wain
    Jun 13, 2013 - 3:02PM

    I dont believe Mr Dar because:

    He has not taken even one step to increase the tax net. Its very easy to take out electricity / phone bills, car / home ownership of an individual and compare it with the tax return. PML-N won’t do it as such individuals are in fact their voter base
    His and PML-N’s leaders tax is less than what he has imposed on a professional earning more than 500K / month.
    Why is a hard working professional who already pays tax is being penalized when all the fuedals dont pay tax

    The budget clearly supports tax evaders and applies more on honest tax payers.

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  • KP
    Jun 13, 2013 - 3:07PM

    Surprisingly, in Pakistan, there are only 3,000 people who are legally earning PKR 7m per year or more (around USD 5,800 per month).
    I wonder where these 3,000 people go for shopping. Of you look at the Malls in all the major cities of the country at any point you will see more than 3,000 people shopping. All these SUVs and luxury cars are only for 3000 people. If this the case, the entire luxury business need to be closed down. Common people earning less than USD 5,800 per month will not be able to afford these luxuries.
    The biggest problem is the tax net is restricted to salaried individuals only. Unless we don’t take concrete steps to broaden the tax net the problem can not be solved.
    Who will sponsor the political campaigns of the parties if political parties add these people to the tax net.
    This is hopeless case and hopeless phenomena. No solution expected.

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  • Imran Khan
    Jun 13, 2013 - 3:25PM

    This is business friendly budget….but it will facilitate only middle class and upper middle class and elites of the country…some indicators are very clear in this regard. major source of revenue is still sales tax being paid by poor of the country. Income tax is still below 1000 billion which mean the people those who are beneficiaries of this injustice economic system is still stealing tax. That is the reason tax ratio of GDP is 10% in Pakistan and in India this ratio is 17%. I agree with the commentator that taxing the high wage working class doesn’t mean taxing the rich….

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  • Mohammad Shahryar
    Jun 13, 2013 - 3:30PM

    Put tax on agriculture if you really need to tax the rich ..

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  • Rumormonger
    Jun 13, 2013 - 3:35PM

    Dar is taxing the group which financed PTI.

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  • Dr. Asad Sadick, Germany
    Jun 13, 2013 - 3:40PM

    Do you want a Gold medal for screwing us?

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  • JAM
    Jun 13, 2013 - 3:43PM

    in budget income tax means tax on salaried person… why not you bring whole sale market dealers in tax net… in lahore, Shah Alami, Branderth road, timber market, and other whole sale markets are out of tax net.. no one is paying tax …

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  • Anoni
    Jun 13, 2013 - 3:43PM

    Taxing the salary class in name of being Rich. Way to go Mr Dar Tax

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  • RQ
    Jun 13, 2013 - 3:56PM

    taxing the rich

    you must be kidding.

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  • raja
    Jun 13, 2013 - 3:59PM

    It seem Dar sahab pleased his boss Mian Nawaz Sharif by announcing 500 housing schemes and providing loans to youth to build houses….It mean Ittafaq group will be flourish in Pakistan….why bother with debate that taxing rich or not..if they were taxed, they know how to steal taxes in Pakistan… now this point is clear that the only wage people cannot evade from tax and this is safe and ensured scheme of collecting tax. This is forced tax like sales tax also called stealth tax and this is not taxing the reach.

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  • Mohammad Ali
    Jun 13, 2013 - 4:01PM

    Nawaz govt. has always an eye on the savings of poor and middle class people. When Pakistan went atomic, all foreign exchange accounts were ceased while the rich had already taken out their money. The people were only allowed to withdraw dollars converted to rupee at lower rate than the market rate.

    Once again, his govt. has taxed movable assets of poor and middle class. The rich don’t keep their money in Pak banks but invest in property or keep their money in foreign banks. The hard earned money of people invested in banks and national saving schemes has now been the target and the budget proposes to tax this money by 0.5%. According to National Savings Org. public investment in various schemes is over 2,500 billion rupees which will bring over12 billions to the govt. kitty but the rich elite having palaces in various cities have been protected by not taxing the real estate.

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  • NMA
    Jun 13, 2013 - 4:02PM

    Its sad to see populist political tactics in Pakistan. The fact is that the REAL rich will not pay this – will the bhuttos or the sharifs or any chaudries pay this? It will only end up hitting a small proportion of actual salaried people.

    Apart from that, where has this sort of tax ever been successful? In the UK the previous government implemented a 50% tax above a certain income and all studies showed it REDUCED net tax take from the top level. They then implemented a “bankers bonus” tax as a one off – all bonuses that year were deferred! In France the “socialist” government has implemented an insane 75% tax on high earners – well all higher earning entrepreneurs have now left the country and their economy is once again heading to recession….. wish we would actually learn from the west rather than just blindly copying them !

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  • Awam
    Jun 13, 2013 - 4:11PM

    Great work!!!!!!!! taxing oil, milk food!!!! plus direct taxes 18% and indirect taxes above 30% (paid by general public)!!!!!!!!!!.. No tax on agriculture.. WOW…

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  • Mohammad Ali
    Jun 13, 2013 - 4:13PM

    Why the govt. distinguishes Agriculture income from other incomes. Earning from any source is an income and should be subject to income tax. Exempting agriculture income from income tax is protecting the landed elite. It is a futile argument that taxing of agriculture income is a provincial subject. The poor farmers do not earn hefty amounts as do the landed elite. Can Mr. Ishaq Dar give example of any farmer whose son or daugher is attending posh schools or studying in prestigious university abroad. Only the children of the elites are enjoying luxurious life whose parents are ashamed to pay income tax.

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  • Asif Ejaz
    Jun 13, 2013 - 4:20PM

    calculate your tax http://goo.gl/IjnQE

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  • ishrat salim
    Jun 13, 2013 - 4:25PM

    There is no mention how he is going to increase the tax base ? niether there is mention of agriculture tax, nor increase in tax to people who are having big properties…?

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  • Adnan
    Jun 13, 2013 - 4:26PM

    Why not start by paying tax yourself, Mr Dar?

    And once you have done that, why not ask your boss (that great tax-evader) to pay too?

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  • Maverick
    Jun 13, 2013 - 4:28PM

    You make Hafeez Shaikh look like an Einstein!

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  • Tahir Ali
    Jun 13, 2013 - 4:29PM

    Dar Saheb; through Income Support Levy you are only taxing those who are already filing Income Tax Returns and not those who do not file their Return of Income.Only about 14,980 people declare income over Rs 5,00,000. so they are the only ones that will get hit.The law should be amended and the deduction should be automatic and Banks and Stock Brokers should be made withholding agents in case of those persons who do not file Proof of filing of Wealth Statements before 31 December 2013 with Bank/Stock Brokers /CDC/National Clearing.

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  • Jibran
    Jun 13, 2013 - 4:49PM

    Biggest source of income is government borrowing. With this deficit budget, inflation is sure to go up. Next comes the sales tax. Income tax is way below in the list. Still this accountant has the nerves to claim that he is taxing the rich. Who is he trying to fool?

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  • Naeem
    Jun 13, 2013 - 5:21PM

    You are like PPP, not understanding that the Public knows all what you are doing and and why. Perhaps you dont even know deceptive statements are also lies.

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  • Khan
    Jun 13, 2013 - 5:25PM

    The Budget is PUNJABI Friendly,

    Most of the Punjabi businesses are non taxed i.e. Agriculture.

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  • Babar
    Jun 13, 2013 - 5:37PM

    Does Nawaz Sharif fall in this category?

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  • Babar
    Jun 13, 2013 - 5:38PM

    Does Nawaz Sharif or any of the other N-league’s industrialist friend fall under this category? Or is it just again going to be a highly successful but salaried professional?

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  • Mohammad Ali Siddiqui
    Jun 13, 2013 - 5:56PM

    1% additional sales tax will also be paid by the poor.

    How many people in Pakistan are rich and how many people are poor?

    Being Federal Finance Minister, you must be having the data.

    The poor voted for PMNL(N) and brought you people in power. You have stabbed the poor people from the back.

    The rich people can afford to by a Roti even if it is sold by Tandoorwala for Rs.100/- but poor can not.

    You must take the 1% additional sales tax back, otherwise, PML(N) is going to have a bad name right from the beginning.

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  • Usman786
    Jun 13, 2013 - 6:23PM

    put another slab for super riches earning more than Rs 2 million per month. agriculture income of less than Rs 50 million is spared. why?
    ask ISA/US to provide USD 100 billion for losses caused due to Afghan war and reaction of drone attacks? otherwise back off

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  • Shakir Lakhani
    Jun 13, 2013 - 6:31PM

    This a highly unfriendly budget. Rich people like agriculturists, smugglers and tax evaders have not at all been taxed. It’s the honest salaried class which has been targeted. Mr. Dar evidently thinks we’re all morons when he says he’s taxing the rich. He has exempted hybrid cars costing 2 million rupees from duty and import taxes, because in his opinion even the very poor can easily spend two million. Obviously, he is not aware that most Pakistanis are desperately struggling to survive on less than 50 rupees a day, It is rumoured that the sales tax on packaged milk has been imposed to help someone who owns a dairy farm outside Lahore (un-packaged milk is not taxed in the budget).

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  • Ahmed
    Jun 13, 2013 - 6:33PM

    PMLN have imposed indirect taxes which will increase burden on middle and lower middle class. If there were serious to put taxes on rich then the richest man of Pakistan Mian Mansha would not be part of the recent meetings of federal government

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  • Pakistani
    Jun 13, 2013 - 6:57PM

    We will gladly support you, only when you implement this “IF”

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  • Mir
    Jun 13, 2013 - 7:00PM

    This is a story of tax collection. Tax collector sent a team to collect Tax. At the end of the team came back and reported sector A gave full tax and sector B refuse to pay tax and we were harassed. Next day tax collector sent the team back to sector A to collect the short fall.

    Moral of the story is that collect the Tax from the people who always pay tax.

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  • Ali (Texas)
    Jun 13, 2013 - 7:03PM

    Very business oriented budget…which, in my opinion is best !
    when businesses grows in the country, then everyone gets busy and start earning….
    I hope our country’s production in many sectors grows and it will start showing in a matter of months only….

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  • OK
    Jun 13, 2013 - 7:30PM

    Salaried people are not “rich.” Some are but thats only a handful. PKR 7million per annum is alright but it doesnt make you “rich”. Yet these incremental taxes are hitting them. What about business men (and women)?? They will just expense their perks through their companies, bringing down their corporate taxes payable, while also minimizing their personal income taxes payable. Correct me if i there are limations in them doing that.. i prefer to learn and change my views rather than live in ignorance unlike most people.

    In many countries ,perks are taxable as well…why doesnt the FBR implement similar regulations in pakistan as well.

    I will end up paying a few extra percent in taxes. I have no issues with that as long as the government is able to use it wisely for the well being of the country and the less well off (who are basically born into a life of slavery)…which means no silly laptop schemes, no expensive metro bus systems, no vip services/perks and ofcourse, amongst many other things, no facilitating corrupt activities…oh, this means i should evade taxes!
    But to get back to the point, shouldnt the government also close out the loopholes that allow business people to evade taxes…….but then they wouldnt have the pro business tag associated with them..the pro business tag surprises me….because werent the worst economic days during nawaz’s time?? post nuclear bomb? businesses did well then didnt they..

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  • ;-)chief
    Jun 13, 2013 - 7:34PM

    Zardari is an angel……???
    Just vote…..!!!Recommend

  • Tariq
    Jun 13, 2013 - 8:01PM

    Main Saheb must tax the rich and it is about time the large retail tax evaders be brought into the tax net. There should be no tax on milk, vegetables and other items consumed by the poor. The state neds to withdraw all tax exemptions to those drawing salary above Rs4 Lakh annually,

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  • Mr
    Jun 13, 2013 - 8:41PM

    Rs 170/per person/per year for health,..are you kidding me?

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  • shahid
    Jun 13, 2013 - 8:45PM

    Peoples party had thier five years.Now it is thier turn.They both are differnt sides of the same coin. MIss you Musharraf

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  • Morons
    Jun 13, 2013 - 8:59PM

    Dar is true. He has taxed all the “rich hearted” people of Pakistan..

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  • hmmm
    Jun 13, 2013 - 9:28PM

    Comments are so ignorant, you should be asking about corporate taxes as that is the medium through which the elite earn / retain their money

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  • Yusuf
    Jun 13, 2013 - 9:30PM

    It took a Rocket Scientist to Engineer Pakistan Budget 2013-2014….Where are you Mush, Get Back on your feet at once, Now.!!!!!!!!!

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  • salman
    Jun 13, 2013 - 9:43PM

    @hmmm:
    yeah, corporate taxes have been reduced.

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  • Anjum Arshi
    Jun 13, 2013 - 10:10PM

    They will take away one third of my income, and in return give me load shedding, insecurity, broken roads, dirty, crowded hospitals, no education for my children, no protection from bhatta takers and dacoits. I will have to wait hours stuck in traffic because Dar will be passing. This is the punishment for living in Pakistan.

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  • Sandip
    Jun 13, 2013 - 10:36PM

    Assuming what the Finance Minister says is true, how about imposing a one time tax of 50% on all landholdings above a certain limit at current market prices. I am sure that would be enough to wipe off a significant portion of Pakistan’s debt.

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  • Abdullah
    Jun 13, 2013 - 10:50PM

    Dar Sb why agriculture is again tax exempted? Tax should be impose on agriculture sector

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  • asim
    Jun 13, 2013 - 11:17PM

    Politics is in the hands of rich elite class and its funny they talking about Poor people;
    Don’t worry Time is coming when they will ask for your wealth which infact belongs to the people

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  • Muslim Leaguer
    Jun 14, 2013 - 12:00AM

    Pakistan has the lowest Tax-to-GDP ratio in the world.
    General Musharraf’s 9 year dictatorship & PPP’s 5 year rule did nothing to improve the resource mobilisation and kept their heads burried in the sand.Recommend

  • Salman Ahmed
    Jun 14, 2013 - 1:49AM

    Precisely how are you trying to tax rich by increasing indirect taxes? I heard you’re a qualified CA. But eh what? You meant “Rich with problems”?

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  • Ahmad Malik
    Jun 14, 2013 - 2:16AM

    Why not increase the tax base instead of increasing taxes… tax the corrupt, rich or not.

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  • Imran
    Jun 14, 2013 - 8:16AM

    Nawaz Sharif payed Rs. 50000 in tax last year. enuf said!!

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  • fahad
    Jun 14, 2013 - 11:40AM

    yah dont cry guys its you who have voted PMLN sharif waited nearky 15 years and now he is not gonna miss out on this opportunity

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  • Hafiz Shah Ali
    Jun 14, 2013 - 1:49PM

    Dar Saheb; so only 3,000 people declare income over Rs 5,00,000?. What is FBR doing; is this the level of incompetence of FBR.I think FBR has become dysfunctional and some persons in FBr need to be removed

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  • I. Ahmed
    Jun 14, 2013 - 11:55PM

    I think by ‘affluent’ he means people who are educated and pay taxes!

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  • NA
    Jun 15, 2013 - 6:48AM

    Indirect on the people of Pakistan tax is not fair, impose direct tax on the affluent class then you will have support from middle and poor class

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  • Razi Ahmed Abbasi
    Jun 15, 2013 - 3:09PM

    @lkhan: I don’t think PM and his team are taking this sensibly.Nawaz cannot stay in Islamabad on weekends and has to come to Lahore,like on the previous occassions.When in Islamabad,his dishes used to come from Lahore as,probably,his Bawarchi is in Lahore.Imagine how he is going to reduce PM house expenses.
    Things have not changed.What Shahbaz Sharif was doing there during Nawaz meeting with Kiyani.In the oath taking,who was there next to Gen.Wain-chairmanJCOS.Tabdeeli means change at hearts.

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