Proposals to make tax structure mistrust into trust.

Byline: Khalil Ahmed

PAKISTAN and GULF ECONOMIST had an exclusive conversation with Syed Shariq Waqar vis-a-vis Tax Challenges in Pakistan. Following are the excerpts of the conversation.

Taxation is always treated as a sword on economic growth whether at macro level or at micro level. Common man is always afraid of tax. Tax authorities are always considered as villain as shown in movies. Taxation system has been simplified and has become nation serving tool in the developed countries. In the third world countries where education is not standard, poverty is a big issue and feudal lords control the taxation system, tax becomes a nightmare for everyone. In Pakistan, taxation system now has become a very complex tool. Every year we spend a lot of money just to understand the impact of any new taxes, how they are calculated and what is their debit and credit and how they need to be handled or how to avoid. Propaganda, strikes, debates on media, seminars and many more events are held just to handle few percentage increases or decreases in a tax.

Now back to economic growth. What common basic needs are:

  1. Food

  2. Shelter

  3. Education

  4. Health Service

    What businessman wants:

  5. Ease of doing business

  6. Higher profits

  7. Zero taxation

    How these goals can be achieved is a million-dollar question. The four demands of a common man can't be achieved without imposing taxes, and three basic demands of entrepreneurs especially the second one is difficult to digest by the government officials.

    The four basic demands of a common man are their right. As most of the developed western nations are doing and this is also the basic reason of migration from third world to the western world.

    Whenever three demands of businessmen were not fulfilled, they immediately went on protest, make associations and pressurize the high ups. On the other hand, if businessmen give up raising their hands and not make money, common men also get hurt because their all four desires are only fulfilled through businessmen from where they earn money.

    In developed nations, the basic necessities of common men are taken care by government through their taxes, while in third world countries government always cries for deficit budget and raises a 'begging bowl' for loan. What's the solution for this challenge. In my opinion, in countries like Pakistan as we have quite complicated taxation structure, we have Sales Tax, Income Super Tax, Withholding Tax, Federal Excise Tax , Provincial Tax...

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