Reviving the inheritance tax.

Forget politics. It's inhuman to burden the crushed ordinary folks with additional levies when the government fails to deliver on its basic responsibility of delivering amenities and security. It's about time to revisit the highly regressive tax framework and tap into piles of unearned wealth accumulated by the elite classes in Pakistan.

Pressed by circumstance, the government did something that failed to grab headlines or capture public attention. An amendment in the Finance Act 2022 ruled to tax capital gains on the sale and purchase of property, including gifted and inherited estate.

Experts believe that, in effect, the government has revived inheritance tax through the said amendment. Some opposed the move declaring the capital gain tax on a gifted and inherited property a violation of the Constitution. Corporate Pakistan saw the step as yet another attempt to pile additional tax burden on people and companies already in the net. It repeated its appeal to broaden the tax net instead.

The fact is that for 29 years, Pakistan had an inheritance tax called Estate Duty Act 1950. A quick glance at the said Act revealed that assets under Rs100,000 were exempted at the time. However, the tax rate was determined by the legislature on an annual basis in the Finance Bills.

Businessmen weigh in on whether the capital gain tax on a gifted and inherited property is progressive or burdens those who are already over-taxed

General Zia ul Haq abolished the Estate Duty Act 1950 soon after assuming power as he projected it to be in conflict with the Islamic Jurisprudence.

The information on how much revenue this tax actually mobilised was not readily available. The said levy was completely forgotten in the relevant circles and faded from the collective public memory. When approached, the current crop of tax lawyers and officials were caught unaware.

Tariq Chaudhry, Member of Appellate Tribunal Inland Revenue, Lahore, who held multiple important positions in the Federal Board of Revenue (FBR), was an exception. He shared the online link to the 1950 Act that he said was repealed in 1979 'without any debate or deliberations'. For further details, he pointed towards Pakistan Legal Decisions (PLD) federal statutes in lawyers' libraries.

M Abdul Aleem, Secretary General, Overseas Chamber of Commerce and Industry, recognised the utility of inheritance tax in developed countries but said that Pakistan, with roughly over 40 taxes, including provincial and local...