ICCI president says dependence on indirect taxation increasing poverty
Islamabad Chamber of Commerce and Industry (ICCI) on Sunday said that Rs 40 billion mini budget had destabilised the tax structure which could have serious repercussions.
“The move has increased government’s dependence on indirect taxation which was already tilted heavily on the wrong side,” said ICCI President Atif Ikram Sheikh.
He said that the mini budget would increase disparity in distribution of wealth which would result in increased poverty, unemployment and extremism.
Talking to Pakistan Economy Watch President Murtaza Mughal, Iftikhar Khan and Malik Sohail, he said that the country was suffering from regressive tax system as over seventy per cent of the taxes were collected through indirect taxation. He said that FBR and the government should enforce a proper direct taxation system to force the elite to discharge national obligations and give some space to the poor.
Sheikh said that around 140 million mobile subscribers were paying around 34.5 per cent as tax despite the fact that a majority of them did not have taxable incomes. On the other hand, out of 15 million rich and 25 million upper middle class only half a million file returns which proves that there is something wrong with the system.
Dr Murtaza Mughal said that imposition of additional taxes to show improved collection was not acceptable. He said that the system continued to support rich at the cost of the poor, thus widening the income gap which was fanning extremism and lawlessness in the country.