Byline: Khalil Ahmed
Syed Shariq Waqar FCMA is a qualified Cost and Management Accountant having 23 years of diversified experience in different trades such as manufacturing, retail, aviation and education industry. Many of his ideas especially in the taxation area have been acknowledged and become part of policy at professional levels.
Pakistan and Gulf Economist had a conversation with Syed Shariq Waqar regarding taxation on the salaried individuals. Following are the excerpts:
Tax is the biggest nightmare for everyone whether you are from a salaried class or business class. Salaried individuals are the most victimized community since they can't shout, can't smile or can't cry, in whatever way inflation or taxation affect them. In countries like Pakistan exchange rate directly hits the salaried-class pocket. They are ignored, they are helpless, they receive their salaries later, but their tax is already deducted. A major contribution in taxation comes through 'Salaried Individuals'. Higher taxation always causes higher inflation which hits nobody but the common man who mostly belongs to 'the Salaried Class'.
Salaried class is not only the biggest contributor in taxes, it also contributes highly in government donations, like dam funds, hospital development charities, street beggars' charities etc. They are also the biggest victims of street crimes. Government, whenever in dire need of money raises taxes, which results in the form of higher prices of groceries, utilities, luxuries etc. which eventually causes troubles for the salaried-class. Higher cost of taxation means higher cost of production, logistics and energy etc. At the end of the day an entrepreneur must bear this gigantic cost increase and to save their profit margins forces for the right sizing, which is converted further in downsizing culminating with the victimization of the salaried-class.
Increasing efficient technology levels also attracts entrepreneurs to cut down their cost and a 'Monster' of downsizing digests large number of workforce, not only inefficient workers but sometimes mostly in government organizations also good and smart workers are forced to leave the organization, because of high-end politics and inefficient networks. Taxation on salaried-class is always a high-end debate.
Now let's see how to tackle this issue. Tax on salaried-class should be zero at all levels, but a million-dollar question arises, 'How the government can bear this tax burden...