ISLAMABAD, (MANEND NEWS): Taxpayers Alliance Pakistan has
released a Charter of Demands for the upcoming federal budget which
defines broad tax policy and principles, that the Alliance considers
integral to tax reforms which can lead to economic growth.
The Taxpayers Alliance has asked that the Government must commit
to fiscal discipline, minimizing its wasteful expenditures while
maintaining complete transparency with a view to demonstrate to the
public that their taxes are used in the most judicious manner.
The Alliance has called for a shift from the regressive taxation
structure to a progressive one by increasing reliance on direct taxes
though imposition of a low-rate, broad-based, predictable and
wherever possible, flat rate taxes. The Taxpayers Alliance has called
for, and supported the move to, end discrimination and exemptions in
taxes and has urged to tax all sources of income uniformly.
Highlighting the plight of withholding taxes, the Alliance has asked for
a gradual elimination of all presumptive taxes with certain exceptions.
The Taxpayers Alliance has also called for considering negative
taxation while eventually replacing direct cash transfers, subsidies and
cross-subsidies which suffer from poor selection thus wastage of
The 14 points charter of demand is an evolving document, which the
Alliance has now released for open feedback and consideration by the
budget policy makers about two months before the budget is
announced. These points are:
- Government must commit to fiscal discipline, minimizing its
wasteful expenditures while maintaining complete transparency with a
view to demonstrate to the public that their taxes are used in the most
- Taxes should be few, low-rate, broad-based, predictable and
wherever possible, flat.
- Ideally, income tax and a mild wealth tax on certain types of
wealth should become the main tool of tax revenue.
- There should be no discrimination and exemptions in taxation.
For example, all sources of income must be taxed equally. Those in
need of specific incentives may be provided relief through other
government entities such as BISP, M/O Finance etc as direct transfers.
- Presumptive taxation must be discontinued. Withholding income
taxes may be allowed on salary, dividend, interest income, other
incomes and payment to non-residents under the concept of pay as
you receive the income.
- Import taxes in general and especially for raw material should be
minimized to encourage investment, production and reduce inflation.
- General Sales Tax should be reduced significantly and
harmonized across the federal and provincial jurisdictions.
- Every earning individual or firm or corporate entity must file an
online income tax return which is simplified to the extent that those
people who cannot read/write English, should be able to file their tax
returns on their own and those who need to declare additional
information may be allowed over and above that.
- We should encourage, and not discourage, corporatization
- Compliance cost for registrations, tax payments and returns
filing should be significantly reduced.
- Introduce a penalty (in the form of return of court fee, lawyer
fee and interest payment on amount blocked) on FBR in case of degree
in favour of plaintiff against FBR.
- No General Sales Tax should be collected in advance at import or
- Tax exemptions available on pensions and savings instruments
should be withdrawn. Additionally, on the assumption that a
meaningful negative tax/transfer system will be introduced, all
subsidies and cross-subsidies intended to mitigate the plight of the
poorer segment of the population should be removed. That is, the
quantum of the negative tax/transfer should cover all the subsidies
and cross-subsidies, that are dispensed through various silos within
- Tax credits for innovation and R&D may be allowed only over a
specific turnover of business and/or to the business associations with
clear performance benchmarks and sunset clauses.
Taxpayers Alliance Pakistan is a voluntary network and any Pakistani
citizen, individual or corporate body, who is a taxpayer and agree with
the mission can join the network. It is an initiative supported by an
independent think tank PRIME.