WHILE one fully agrees with the notion that country’s tax to GDP ratio needs to be enhanced and affluent class brought into tax net in order to address economic woes and take the country towards self-reliance, it is also important that government also takes care of those fixed income groups who honestly pay their taxes by means of reducing the tax rate or offering other incentives to them.
In this context, we highly appreciate recent suggestion by former Prime Minister Nawaz Sharif to newly appointed Adviser on Finance Miftah Ismail about not charging taxes from those whose monthly earnings are up to one hundred thousand rupees. In fact the present government since assuming the office has not given any relief to the fixed income groups in terms of enhancing the minimum threshold of the income tax. Every year on the eve of presentation of budget, proposals were made in this regard but they were never made part of the budget document. Now given the recent depreciation of rupee, it has become imperative for the government to give relief to the salaried groups in taxes. The threshold of Rs 100,000 proposed by the former PM is very much reasonable and its implementation indeed will give a much needed relief to the salaried class who otherwise are finding it difficult to meet their expenses be it related to education of children or payment of utility bills. Also the incumbent PM had made a commitment in his first speech on floor of the house that steps will be taken towards enhancing tax net in the country. Indeed an integrated effort is required on that front as by doing so will also help reduce the burden on those already paying the taxes. In addition, steps are also required to simplify the tax return forms. Currently, the tax returns are so complicated that even those having the experience of accountancy find it difficult to fill the forms leave aside the general public. We expect that the FBR will also pay attention towards that end in order to build the confidence of taxpayers and bring more people to the tax net.