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