• Thursday, June 27, 2019

Ready to offend some people in order to increase average tax rate, says Hafeez Shaikh

Discussion in 'Pakistan Economy' started by 313ghazi, Jun 12, 2019.

  1. 313ghazi

    313ghazi SENIOR MEMBER

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    Adviser to the Prime Minister on Finance Dr Hafeez Shaikh on Wednesday insisted that "rich people in other countries pay higher taxes" as compared to the upper class in Pakistan.

    Addressing a press conference a day after the government announced the budget, Shaikh said that the average tax rate of Pakistan is 11-12 per cent, which is "one of the lowest in the world and is not acceptable".

    "If we have to offend some people for this (increasing tax rate), then we are ready to do it," he declared.

    Commenting on the ambitious tax target for fiscal year 2019-20, Shaikh said: "Pakistan's people, especially the rich, will have to be sincere with the country and will have to pay taxes."

    The tax target for this year has been set at Rs5,550 billion. Responding to questions regarding the measures taken to ensure that the tax target is achieved, Shaikh said: "This is not an easy target for us. If there are people who think that this target is not achievable, they won't be entirely wrong given FBR's performance in the past. But this is a new regime and we will try [to achieve the target].The stakes for the country are so high that it cannot be business as usual."

    "We will have to reduce our expenditures and we have to give this message to the Pakistani public that we (the government) will be at the forefront in reducing our expenses. If we are asking people to sacrifice, we will have to convince them that we are ready to make sacrifices as well.

    "So we [adopted] austerity and reduced our expenses notably," he added.

    Shaikh revealed that the distinction between tax filers and non-filers will also be eliminated.

    "If a person, who has been a non-filer in the past, buys a car or property, he will automatically have to become a filer. If he fails to become a filer within 45 days, he will receive a tax liability within half an hour after the 45-day limit has lapsed," Shaikh warned.

    "God willing [these measures] will produce good results and will also satisfy the people who wish for the tax base to be increased so that current tax-payers will not have to bear more burden."

    Shaikh further said that while businesses will not have to pay taxes over exported goods, they will be taxed over products they sell in the domestic market.

    FBR Chairman Shabbar Zaidi, who was also present, said that the government has "moved from traditional system to sectoral analysis [to figure out] which of the industries or sectors are paying less taxes than they should".

    Zaidi admitted that there was a difference between the tax target and the amount of revenue announced in the budget and said that the FBR is identifying sectors that are paying less taxes than they should "without increasing inflation". He added that high-income people will also be included in the tax base in order to remove the discrimination between the rich and poor.

    Justifying the increase in taxes, Shaikh said that the country required money to pay the interest on loans borrowed by past governments.

    "We didn't borrow [those loans] but we have to pay them back because Pakistan cannot default."

    https://www.dawn.com/news/1487781/r...-increase-average-tax-rate-says-hafeez-shaikh
     
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  2. Samlee

    Samlee SENIOR MEMBER

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    Business As Usual Can't Run Anymore We Need To Improve Our Tax Base
     
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  3. Stealth

    Stealth ELITE MEMBER

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    back in 80s, we have Wealth tax.... that was later removed by the govt... that tax is the real thing everyone should pay tax based on his/her assets (cars, motorcycles, properties, gold etc). We must need Wealth tax to collect money from the right instead putting burden on the poor
     
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  4. Dubious

    Dubious MODERATOR

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    yea...I never understood having tax for having a tv- to me it was really retarded!

    Wonder where all that money went anyway!
     
  5. VCheng

    VCheng ELITE MEMBER

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    Wealth is a relative term, please keep in mind.
     
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  6. Dubious

    Dubious MODERATOR

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    yea but they should have realistic list of what to tax! Not everything they deemed needing to....
     
  7. VCheng

    VCheng ELITE MEMBER

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    They have made a commitment to the IMF to balance their books according to accepted standards.
     
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  8. Dubious

    Dubious MODERATOR

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    Exactly accepted by who for who?
     
  9. VCheng

    VCheng ELITE MEMBER

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    Accepted by the Government of Pakistan for its own books.
     
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  10. AZ1

    AZ1 SENIOR MEMBER

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    I was expecting govt to have some sort of perks for those who bring $ in the country like those who bring $10,000 - $20,000 yearly to the country should be encourage.

    Now I read freelancer who works on upwork or other website are tax exempted but for those who send remittance there should be something for them as well so more dollars come in the country.
     
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  11. Hakikat ve Hikmet

    Hakikat ve Hikmet SENIOR MEMBER

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    I have a special soft corner for the accountants!!! They are very loyal to their profession!!! In the USA, among all the professionals, accountants have the highest #of divorces, suicides, prison times etc. for a reason!!! If you want to rope in the crooks find an astute accountant!!! Remember, Al Capone was undone due to his “cooking” the “books”!!! The new Tax Tzar of Pak is an accountant as far as I know!!! It’s the time to panic....
     
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  12. maithil

    maithil FULL MEMBER

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    He has been successful in atleast one aspect : Offending people.
     
  13. 1Paki$tani

    1Paki$tani FULL MEMBER

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    The wealth tax is called Zakat which is 2.5% of your wealth. This is the tax imposed by Islam and if we streamline that both in terms of collection and distribution we can counter poverty issues in our society.

    May people do not realise how much month that 2.5% actually is.

    Any other wealth tax above and beyond 2.5% Zakat is wrong and I do not support that. Though I support effective tax regime.

    They can be offended for I care. They should be willing to share the burden of the nation. They like to use roads, have subsidised fuel and services but dont want to pay tax.

    I would support if government introduces separate fuel prices for non-filers. That is if a vehicle owner who is not filer wants to fill up their car or anything else they must pay for the fuel at the rate without subsidy of any sort.

    Why should they enjoy subsidy from someone elses tax if they cannot bother paying taxes themselves.

    With advancement of technology this is possible.
     
  14. I.R.A

    I.R.A ELITE MEMBER

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    Agriculturists and gadi nasheens remain outside the tax net ........ God knows what exactly it means by increasing the tax base .... in Pakistan.


    Not sectors only ........ it should include regions, trades, professions
     
  15. Abdussamad

    Abdussamad FULL MEMBER

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    We already have zakat for that. It gets used to fund our strategic assets.