That's rather the easiest way to tax. For example the current corporate tax rate in Pakistan is 34% which is around 2% higher than India, 6.5% higher than Bangladesh, 9% higher than China, 13% higher than Asian Average, 9% higher than OECD and around 12% higher than the global average. Which company would like to invest in a country which is suffering from economic growth stall as well as higher corporate tax?
http://www.kpmg.com/global/en/servi...esources/pages/corporate-tax-rates-table.aspx
Corporate profits go to shareholders and their ROI is generally ranging from 2.5-3 years. Foreign investors are given a tax holiday of 5 years this means they are already in plus after taking out the investment. Now the corporate is operating on the money earned from within the country and spend
it, yet extracting profits in the range of 30% or so. Stake holders are generally those people who feed on dividends without working, therefore, putting a higher tax rate on corporate cannot be counted in injustice. What we are presently practicing is capitalistic approach, which has proved to be wrong.
Agriculture has become a provincial subject post 18th Amendment however, except from Sindh and Punjab, none levied the agriculture tax. However, despite this critical leakage, the center tried to plug the hole by not allowing exception on agriculture income given Income Tax hasn't been paid.
I feel that you are unable to differentiate between agriculture tax and tax on income (profits) earned through agriculture. It may have become provincial subject but guidelines are from the federation, just like GST.
Are you serious? probably you should read up on
cannons of taxation. Its preferred to have more direct taxes than indirect taxes rather than curbing out both.
Implicitly this is what I am also saying put a direct tax of 2% on all banking transaction, ensure all transactions go through bank. Thus, killing more than two birds in on shot.
In economics the principal of taxation states, "For a country to function, it needs to have a government. For a government to function, it needs to tax". If you are confident enough to come up with such a theory involves a miracle of country working without having to tax. I am 150% sure than you would be up for Nobel in economics next year.
I haven't denied the need of taxation for governments to run. Yes, what I am talking is the simplest way to generate revenue, which is called tax, for the government and in true perspective a fair way of taxing all. Those who transact more pay more tax, those transacting less pay less tax. Yet in overall perspective people will have relief. No need to have such elaborate income tax departments to harass people and extort money. There will no GST for people to hide their income. Smaller currency notes and lesser circulation of currency in market will curb tendency of bribes and crime. I am confident about this theory, however, this theory does not support capitalistic approach, therefore, it will be shunned at all level. Today if I come with an ideaof siphoning monies in fewer pockets, I will definitely be nominated as per your recommendation. If my theory supports common man, it will not because, when common man has prosperity, capitalism has deficiency of corporate salves.[/QUOTE]
