Flawed tax system is promoting underground economy: Mian Zahid Hussain

0
234
Flawed tax system is promoting underground economy: Mian Zahid Hussain

KARACHI, JUN 10 /DNA/ – Mian Zahid Hussain, the Chairman of National Business Group Pakistan, the President of the Pakistan Businessmen and Intellectuals Forum, the All Karachi Industrial Alliance, and a former provincial minister, stated on Monday that Pakistan will not receive the required amount of loans from the IMF due to poor revenue collection and lack of reformed.

He said that Pakistan must fulfil all the stringent conditions of the IMF to get the required amount, which is politically difficult.

Mian Zahid Hussain stated that expanding the tax base to appease the lender would not be acceptable to tax evaders and could lead to issues for the government, ultimately impacting its popularity.

The veteran business leader warned that if the provinces don’t collect their required taxes, the center will have to increase the burden on current taxpayers to increase revenue.

The business leader stated that the non-cooperation of the provinces has resulted in the failure to collect taxes on agricultural income, GST on services, and municipal tax as required.

Consequently, the central government has decided to increase the burden on the salaried class, pensioners, and other taxpayers.

In addition, efforts are underway to tax rental income, bonds, stocks, property, wholesalers, and retailers, but he stated that it would be preferable to broaden the tax base rather than burden existing taxpayers more.

According to Mian Zahid Hussain, expanding the tax base should target the sectors that are not paying taxes.

He said that in developed countries, taxes are imposed on the rich, the middle class is promoted, and the poor class is helped, whereas it is otherwise in Pakistan.

Taxpayers in developed countries receive better education, healthcare, security, and other services, but this is not the case in Pakistan, which disappoints those who pay taxes.

He pointed out that authorities constantly target the salaried class, while those in their families who work in trade earn more with less effort and pay no taxes.

In this manner, individuals become disenchanted with the tax system and attempt to evade it. It is also leading to the exodus of numerous educated individuals from the country.

He said that it is easy to target the salaried class, but it is difficult to find and collect taxes from non-tax payers, so the tax authorities take shortcuts that have negative effects on society.

Mian Zahid Hussain said that due to loopholes in the tax system, the documented economy is continuously shrinking while the underground economy is flourishing.

He noted that now many employees have started demanding their salary in cash instead of checks to avoid taxes. Increased taxes on the documented economy will lead to a decrease in production and output, thereby increasing the profitability of undocumented businesses.

The size of the black economy will continue to increase due to the wrong priorities, he said.

There is a need to collect an annual tax of Rs 14000 billion, but due to the non-receipt of the required tax, Pakistan has to resort to debt to provide facilities to its people, which has become an unbearable burden for the economy.