The Pakistan Economy Watch (PEW) has said that the reintroduction of across the board Wealth Tax on affluent class of society could potentially allow the generation of heavy revenue. Alternatively, the government can consider levying Wealth Tax on exempted income like agriculture, capital gains, asset gains, and remittances, the body noted.
PEW President Dr Murtaza Mughal expressed in a statement that such steps would help curtail the black economy, contain artificial hikes in property market, safeguard small investors and help the government meet its budgetary targets. Expenditures are growing while income is sliding due to war on terror, performance of FBP and lack of financial discipline, he said during discussions with tax and banking consultant, Mohsin Rafique.
In this scenario, he said, the wealthy should contribute a share of taxes proportionate to their resources to the national exchequer. This has become necessary to foster national development. Dr Mughal said that over 6,000 individuals are involved in real estate business in Clifton and Karachi DHA alone and went on to say that real estate could fetch up to Rs1 trillion if regulated properly.
He said that the Wealth Tax Act was abolished on demand of a former finance minister, which was a great disservice to the nation that resulted in a privileged few to amass wealth while pushing millions below the line of poverty. Speaking on the occasion, Mohsin Rafique said that majority of businessmen show that their enterprises are in loss to avoid taxes while claiming income from exempted sectors.
It was also noted that certain businessmen are willing to invest billions in business but are not willing to pay tax equivalent to that filed by a salaried individual. He demanded that the government review its policies which remain highly counterproductive, adding that the Wealth Tax, if introduced, will boost economy without having to resort to the controversial Value Added tax.
