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Flood tax being opposed in most part of the country

KARACHI: Workers from different sectors have strongly opposed the proposed surcharge on income tax that the government wants to use as a tool to raise funds for the flood-affected people.
The top and mid-level executives view the current official administration with skepticism considering its track record and frequent reports of corruption.
Unlike the IDP (internally displaced people) tax imposed last year on the corporate sector alone, the flood surcharge covers all the salaried individuals, which minimises the possibility of it being struck down in the court of law, lawyers said.
The IDP tax was never collected as hundreds of petitions were filed against it. Ultimately the petitioners won the case.
Former Finance Minister Shaukat Tarin said that the tax was unfair as it penalises the people already contributing to the national exchequer. “Why are the agriculturists not being taxed?”
He said that even the 1.5 million NTN (National Tax Number) card holders were not filing returns. “The tax authorities should go after them.”
The services sector contributes 55 percent to the gross domestic product, but only 18 percent of it pays direct taxes, he said.
Engro Foods CEO Sarfaraz Rehman said Pakistan desperately needs funds and everyone has to dig deep for that. “But this is clearly lopsided. The rural areas and the trade need to contributeóalso others like doctors and consultants.”
He suggested that people should be taxed according to their household expenses.
He said that a database of household expenses including utility bills and school fees should be formulated. “Promise you the number of people in the tax net will hit at least five million.”
An official of a foreign bank said that if salaried class protested such measures, it looked like the bad guys.
“A closer examination of the facts will show what an inept government we have and thus there is little guarantee that our enhanced tax contribution will ever reach the needy.”
She said the FBR did not have money for tax refunds due for the past two years. “I have been entitled to get about Rs100,000 but have been told it is not going to happen this year.”
Another mid-level banker said she did not understand what the Zardari government wanted. “First there was an IDP tax on our bonuses and now this. We already pay enough taxes without getting anything from our so-called government.”
She asked if there was free education, medical facilities, transportation and old-age benefits for the needy. “Why can’t the government raise money by selling the fleet of cars being used by the government officials or even if President can reduce his international visits and vacationing?”
Mustafa Syed, Director, Marius International, said that he supported paying taxes for reconstruction of the country. But the disparity should be removed, he said.
He added that tax percentage ranges between zero percent and 20 percent, but any person earning Rs8,650,000 or more pays 20 percent tax. “This means irrespective of how much you earn above 8.6 million rupees, your tax percentage remains constant.”
It was the prerogative of the people to decide as to when and where they would contribute money for a cause like rehabilitation of the flood-affected people,said by Shahid Hussain, CEO of General Tyre.

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