Pakistan l 50% MPs are tax chor.

[Panther 57]

Flat rate is a bad idea. Most developed countries have graduated income tax rates where you pay more per marginal (extra) dollar you earn.

The biggest problem in Pakistan is less about the rates and more about enforcement. You can have any rate on the books but, if people routinely falsify their income, then the whole thing is just a drama.

Tax is evaded by the people who earn most. Salaried people are the most suppressed.

 

[cloud_9]

How is Income tax deducted in Pakistan ? Is it deducted by the employer ?

 

[SBD-3]

At least, we have explanations from Imran Khan and Sirajul Haq, where are the Nihari party MPs so far? Any clarifications from them, even NS's name is that list??

Explanations? These are falsifications and public misinformation being spread to cover their backs.........Here is the reply from PML-N, not finding false covers, simple and straight forward.

Wrong EOBI contribution is for everyone.

Yes,yes yawn.....

How is Income tax deducted in Pakistan ? Is it deducted by the employer ?

For salaried class, yes, it is deducted by the employer and deposited with the FBR on behalf of employee.
A component of income tax has been added as adjustable to other transactions.
For rest, they are required to deposit their declared income tax personally with FBR.

 

[Panther 57]

Yes,yes yawn.....

EMPLOYEES' OLD‑AGE BENEFITS ACT, 1976


(ACT No. XIV OF 1976)

[ April 15,1976 ]

An Act

to repeal and re‑enact the Law relating of Old‑Age benefits for the persons employed in industrial, commercial and other organizations.


WHEREAS it is expedient to repeal and re‑enact the law relating to old‑age benefits for the persons employed in industrial, commercial and other organizations and matters connected therewith:

It is hereby enacted as follows: ‑

CHAPTER 1

PRELIMINARY


1. Short Title, Extent, Commencement and Application. (1) This Act may be called the Employees' Old‑Age Benefits Act, 1976.

(2) It extends to the whole of Pakistan .

(3) It shall come into force at once.

1[(4) It applies to every industry or establishment.

(i) wherein ten or more persons are employed by the employer, directly or through any other person, whether on behalf of himself or any other person, or were so employed on any day during the preceding twelve months, and shall continue to apply to every such industry or establishment even if the number of persons employed therein is, at any time after this Act becomes applicable to it, reduced to less than ten; or


2[(i-a) wherein less than ten persons are employed if such industry or establishment voluntarily applies for application of this Act and this Act shall apply to such industry or establishment for the date of submission of an application by such industry or establishment; or


(ii) which the Federal Government may, by notification in the official Gazette, specify in this behalf.}

_________________________________________________________________

1.Sub-sec.(4) by Ord. XVII of 1983.s.e enforced from July 1,1983=1983 PLS 81

2.Inserted Cl.(i-a) in sub-sec(4) by Labour Laws (Amendment) Ordinance,2001(Ord. LIII), s.7(1), effective fromJuly 1, 2001 : Gaz.of Pak. Extr. Pt. I, Oct. 20,2001 .


2. Definitions.‑In this Act, unless the context otherwise requires,‑


[(a) "benefits" mean old‑age pension, invalidity pension, [survivor’s] 2 pension, old‑age grant and such other payments as may be determined by the Federal Government from time to time;}


3[(aa) "Board” means the Board of Trustees constituted under section 7 ;}


(b) "Contribution" means the sum of money payable to the Institution by the employer {or by the Federal Government}4 in respect of an insured person under the provisions of the Act.

5[(bb) "employee" means any person employed, whether directly or through any other person, for wages or otherwise, to do any skilled or unskilled, supervisory, clerical, manual or other work in, or in connection with the affairs of, an industry or establishment, under a contract of service or apprenticeship, whether written or oral, express or implied, and includes such person when laid off {:]]

6[ Omitted]

Provided5[ * * ] that a director of a limited company or of a corporation set up under any law shall not be treated as an employee under this Act, irrespective of his wages or emoluments ;]

7[(c) "employer", in relation to an industry or establishment, mean any employee, and includes‑

(i) in the case of an individual, an heir, successor, administrator or assign;

(ii) a person who has ultimate control over the affairs of an industry or establishment, or where the affairs of an industry or establishment are entrusted to any other person (whether called a managing agent, managing director, manager, superintendent, secretary or by any other name), such other person ;and]

8[(iii) [Omitted]

(d) "employment injury" means a personal injury to an insured person caused by an accident, or by such occupational disease as may be specified in the regulations, arising out of and in the course of his employment:

_________________________________________________________________________________

1 Cl..(a) added after re-numbering original cl.(a) as (aa) by Or. XVII of 1983, enforced from 1st July 1983= 1983 PLS 81

2. Subs. for word”widow’s”,by Employees’ Old Age Benefits (Amendment) Ord. 2002,s. 2(a)

3. Original Cl. (a) re-numbered as (aa), ibid.

4. Add. By Finance Act, 1986(Act I of 1986) s.11.1.(a)

5. Cl. (bb) add by Ord. XVII of 1983.

6. Omitted 1st proviso of cl.(bb) added by Act I of 1986, by Labour Laws(Amendment) Act, 1994.

7. Cl. ( c ) subs. By Ord. XVII of 1983, s. 3

8. Sub-Clause (iii) omitted by Act I of 1986

1[(e) "establishment" means‑

( i ) an establishment to which the West of Pakistan and Establishments Ordinance, l969 (West Pakistan Ordinance No. VIII of 1969) for the time being applies, and notwithstanding anything contained in section 5 thereof, includes clubs, hostels, organisations and messes not maintained for profit or gain and establishment, including hospitals, for the treatment or care of sick, infirm, destitute or mentally unfit persons ;

( ii ) a construction industry as defined in the West Pakistan Industrial and Commercial Employment (Standing Orders) Ordinance, 1968 (West Pakistan Ordinance No. VI of 1968);

( iii ) a factory as defined in the Factories Act, 1934 (XXV of 1934);

(iv) a mine as defined in the Mines Act, 1923(IV of 1923) ;

(v) a road transport service as defined in the Road Transport Workers Ordinance, 1961 (XXVIII of1961) ; and includes any class of industries or establishments which the Federal Government may, by notification in the official Gazette, declare to be establishments for the purposes of this Act.]

(f) "fund" means the Employees' Old‑Age Benefits Fund set up under section l7 ;

(g) "industry" means any business, trade, undertaking, manufacture or calling of employers, and includes any calling, service, employment, handicraft industrial occupation or avocation of workmen ;

(h) "institution" means the Employees' Old‑Age Benefits Institution established or nominated under section 4 [or section 5;] 2

(i) "insured person" means [an employee] 3 who is or was in insurable employment;

(j) "insurable employment" means employment of a person under a contract of service or apprenticeship, whether written or oral, express or implied and in respect of which contributions are payable under this Act;

_________________________________________________________________

1.Cl. (a) subs. By Ord. XVII of 1983, s.4=1983 PLS 81.

2.Words and figure added. ibid.

3.Subs for “a person”, by Act I of 1986.

(k) "invalidity" means a condition, other than that caused by an employment injury, as a result of which an insured person is permanently incapacitated to such an extent as to earn from his usual or other occupation more than one third of the normal rates of earning in his usual occupation ;

(1) "member" means a member of the Board ;

(m) "prescribed" means prescribed by rules ;

(n) "regulations" means regulations made by the Board ;

(o) "rules" means rules made under this Act;

1[(oa) [ Omitted}

2[(P) “wages” means the rates of wages as declared under the Minimum Wages for Unskilled Worker Ordinance, 1969 (W.P.Ordinance XX of 1969)”


[(q) “year”, with respect to insurable employment means, a total of three hundred and sixty‑five days for which contribution are payable, or, in the case of insured persons who are not paid for weekly holidays, a minimum of three hundred and twelve days.]


1 Self Assessment scheme omitted by Finance Act, 2005.

2 Clauses (p) subs. by Finance Act, 2005.

CHAPTER II

INSURED PERSONS


1[3. Compulsory Insurance.‑ All employees in an industry or establishment shall be insured in the manner prescribed by or under this Act.]

 

[cloud_9]

For salaried class, yes, it is deducted by the employer and deposited with the FBR on behalf of employee.
A component of income tax has been added as adjustable to other transactions.
For rest, they are required to deposit their declared income tax personally with FBR.

So why are tax collections (Income tax) so low in Pakistan?