ISLAMABAD – The newly announced Tax Amnesty Scheme will cost Rs90 billionloss to the national kitty on the face of it.
The move under the ruling PML-N government’s economic package is likely towipe out nearly 521,000 taxpayers from the tax net. The government hasannounced unprecedented relief in income tax rates to super rich people.
Internationally, according to a tax official, highest tax rates exist inthe income tax law for those people who earn more.
But the most surprising move was to enhance exemption limit to Rs1.2million from the existing Rs400,000 at a time when the government isnearing to complete its tenure on May 31, 2018 which economists consider apre-election rigging move with no justification.
The internal analysis of the FBR shows that in case the government economicpackage was implemented in its current shape it will lead to furtherweakening of tax compliance. This means that half of the existing taxpayerswill disappear automatically from the tax net, a senior tax official toldDawn.
The income tax system has already deteriorated owing to increasing relianceon withholding taxes. Most economists view withholding taxes in the currentshape as indirect taxation in Pakistan, which hit the poor the most.