Taabeer-ul-Rahman
Pakistan is currently bearing the burden of foreign debts of PKR 14.5 Trillions (US$ 59,383/- millions approx.) and according to survey every new born baby in Pakistan is under the debt of PKR 33,000/- and now it’s a time for us to realize and make sure that our newborn baby will be free from external debts.
To come out of foreign debts, Govt. needs to generate more revenues. For this purpose the Govt. of Pakistan should impose Income Tax on the general public and the different nature of businesses. If the government in a position to generate billions income tax in every month and make a plan to pay (foreign debts) PKR 1.5 trillion per year than it will easy to pay all debts in a short period of time and hopefully we will get freedom from foreign debts until year 2025.
An income tax is government revenues (tax) imposed on individuals or entities (taxpayers) that varies with the income or profits (taxable income) of the taxpayer.
To generate income tax from an individual; It is compulsory to register every person whose age is 18 years with the Federal Board of Revenue and get 10 digits National Employee/Employer number (NEN) that could be valid for the period of five years. (Both numbers of NEN & CNIC can be same as well).
It is also necessary for sole proprietor/partnership business/Public limited companies/private limited companies etc. to get national tax number certificate, otherwise they have to pay some fine if they remained un-registered.
The government has to complete the registration of foreigners/refugees/migrated people in Pakistan as well as registration of all overseas Pakistanis.
Do you pay taxes? If not make sure you do because if you don’t you don’t have the right to complain.
In modern state system, revenues of a state have the status of fuel which runs the engine of a state. It is in fact the backbone for running the administrative affairs of a state ranging from defense to development and security to social welfare. Historically, taxes have been the main source of revenues of any state, the levy and collection of which has refined into the present day modern taxation system.
More importantly increased tax collections should be made from those who have so far kept themselves out of the tax, let to give confidence to the honest taxpayers and to take out the root cause of unethical business practices in the country.
To earn maximum revenues the policy of tax charged by the FBR should be revised and after this revision it is the obligation of every employer and employee to pay income tax. Hence, the concept of charging the tax on minimum income Rs. 400,000/- p.a. should be revised and introduce a new policy for charge of income tax every month.
According to FBR new tax calculators, if monthly income of a person is PKR 33,333/- than he is fully exempted to pay income tax, similarly, if the earning of a person is PKR 50,000/- per month than he is paying tax Rs. 10,000/- per annum only, however if the government revise the tax rates and applying new (revised) tax rates policy than result will be changed for example the earning of a person is Rs. 50,000/- per month and government charge Rs. 4,500/- tax each month i.e. Rs. 54,000/- per annum, it means if the government implements new tax rate policy than government will earn Rs. 44,000/- more as compare to old tax rates.
Therefore, the minimum monthly salary of a lower grade worker is Rs. 10,000/- and tax rate for this income is 5% i.e. Rs. 500/- it should be charged every month and bank deduct Rs. 500/- in the favor of government tax revenue and balance salary i.e. Rs. 9,500/- credited into the account holder. In transaction particular/details bank must mentioned employer/NTN number because it’s easy to know from where he generates income. Every employer should transfer the salary of his employee into his bank account and there should be a penalty for employer if found to paying salary in cash. As it is beneficial for employee as well to claim his decided salary and due to this banking sector will also be developed.
We want to see Pakistan in the list of well developed countries of the world and want to see the happy faces of my people. To facilitate the people first of all it is necessary to pay all foreign debts.
It is required to improve our taxation system and to come out the problem of registration & collection of tax system in Pakistan and bringing large underground economy to documentation.
The government of Pakistan is facing not only how to increase current tax revenues, but how to widen the tax base to prevent tax-revenue erosion in the future.
Everybody talks about accountability and transparency in Pakistan. But every government, civil or military, that has ruled Pakistan since 1948 has effectively ensured that there would never be a complete centralized documentation of the economy, land ownership and tax records in the country.
According to the International Development Committee, Pakistan had a lower-than-average tax take. Only 0.57% of Pakistanis or 768,000 people out of a population of 190 million pay income tax. Therefore, we have to introduce some policies for implementation, collection of tax and to increase the number of tax payers.
Pakistan gravely lacks in tax culture, rather it comes as an alien concept. The real dilemma of country is that rich as well as poor both are not willing to pay the taxes on the ground of overall insecurity and lack of basic necessities. Government is of the view that in absence of revenue, demands of the public can not be fulfilled thoroughly. In this dismal scenario the only available option to the Government is to improve its internal revenue collection mechanism because how long the donors agencies will help us with their tax payers money when we are not trying to improve our own revenue system.
The government has to adopt strict policy for registration. If an individual will not get NEN card or business registration certificate/NTN etc. until April 2016 than there should be charged some fine on such individuals or can be put into Jail for the period of one month. Furthermore, it is noted that for upcoming election in year 2018 a vote could not be registered without national employee/employer number.
The Ministry of Interior gives the authority to FBR for registration of foreigners/refugees/migrated people who are living here in Pakistan for long time. It is mandatory to get Registration card whether employed or not. The fee charged by FBR for this registration is Rs. 3,500/- each which is valid for the period of one year.
Here is the example/technique to charge income tax:
For e.g. If Mr. A (NEN 325614301) is the visiting lecturer in Iqra University (NTN/NEN 5631024) and he is also visiting lecturer in NUML (NTN/NEN 5632022); both employers are transferred his salary into his bank account, now if we want to check & verify the income of Mr. A, It is required to enter national employee number and we come to know that he generates income from two sources i.e. from Iqra University & NUML university, similarly when we want to know about the details of employees of Iqra University, we just need to put/enter its NTN/NEN and there will be the list of employees who are working with Iqra University and if Govt. find any other employee which is not registered than it will face the penalty by Iqra University.
The FBR can make different departments whose responsibilities are to collect taxes. For e.g. Education department is responsible for registration and collection of taxes of universities, colleges, schools, teachers, etc. and after every six months different departments will show and issued their performance report.
The Govt. are facing huge crises of debt if such ways are used and utilized this tax in proper way then that day is not far Pakistan will free from curse of debts and this tax further will be utilized with in Pakistan. The Govt. should lounge this taxation system in such attractive way that every individual may join hands to have debts free life.
People tend to pay more in taxes, are less likely to use social support programs, and are less likely to commit crimes. This volume examines the monetary value of these benefits over an individual’s lifetime.
The Govt. should also announce some benefits for taxpayers, like; (a) Free medical facility for every individual who is registered with FBR. (b) Regular payment of tax for the period of at least 10 years will get the followings facilities after the age of 60 years, free accommodation, free food, free medical, pension and all other benefits that are required to spend a happy life. (c) For overseas Pakistanis; the Govt. will take the responsibility of full support if they face any problem or any complaint from his employer or local government of that country and undertake to be responsible for the repatriation fee in case of accident or death. (d) Registered Refugees/foreigners will get the same rights as the right of Pakistani citizen and they will never be teased by anyone and Govt. will take the responsibility of their securities.
The Govt. shows its performance (Income and expenditures) after every six months and it can be printed in form of booklet and its marketing should be done through different ways of communication like radios, TV channels, and social media etc. This should be named as “From dark yesterday to bright tomorrow” This should cover progress of last six months as well as it also explain what is government planning for next 6 months.
We are far behind other countries… so far behind that we are mentioned amongst the lowest countries in the world. I hope that the spirit of nationalism will rise in all of us and that we will pay our taxes.