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[1] From: "Arif N. Khan" <ank2000pk@yahoo.com> Date: Mon Jun 6, 2005 Subject: Fiscal benefits for Business Tycoons ONLY ank2000pk Fiscal benefits for business tycoons Ikram Hoti http://jang.com.pk/ ISLAMABAD: Two major facilities for big business concerns will give more favour to the privileged class in the Budget 2005-06, whereas the low and medium income majority would not be offered any relief. There would, however, be no significant increase in the slab of taxable income or rate, say insiders. The second floor of Central Board of Revenue (housing Sales Tax Department) was buzzed with preparations for doling out 15 percent refunds on PTA on the prices of imported and locally purchased consignment by textile tycoons. While the third floor of CBR (housing Income Tax Department) saw some major activity with regard to reducing Income Withholding Tax from 6 to 2 percent. Both fiscal actions of favouring business tycoons would reduce tax liability for the privileged class while taxable slab for the poor and the middle income-earners would either not be increased from (annual) Rs 100,000 upward or put at a negligibly higher amount of Rs 120,000. Reducing Income Withholding Tax from 6 to 2 percent would mean a favour in final tax liability, permanently relieving the big-income class of paying tax on income, while 15 percent refund on the cost of PTA, a major textile and other industrial input, would be a source promoting corruption. It might also invite countervailing duty from the Pakistani textiles importing countries, as it would be a tax subsidy that is highly undesirable in the international market. The WHT at 6 percent is already a final liability of tax payment, allowing big business to reject demand for payment of tax on income on phenomenal amounts of profits generating from production and supply activity. Since indirect (at source) mode of collecting WHT is a basic source of inflation (embodiment of tax in the cost of consumptions), the tax strips low and medium incomes of the power to purchase while reduction in the rate of this tax would only help big businesses make more profits and evade more taxes. The trading and industrialist class is already enjoying the privilege of paying 0.75 percent of tax on their supplies and exports on the total price of supplies, they stand absolved of paying income tax and of declaring actual incomes, preventing tax authorities from tapping their actual wealth for taxes. The Budget 2005-06 is projected to introduce no change in collecting income tax at source on the low and medium incomes besides no major increase in the taxable slab, the brunt of taxation would continue to be borne by this class. The CBR, if directly collecting the tax on income, would be getting 3.5 percent on these supplies, with a right to access the actual incomes, but this policy would not be changing in the Budget 2005-06, say insiders. Apart from these continuations and new privileges, the big income class would be offered 25 percent duty relief on 1600cc and above cars by reducing it from 75 percent to 50 percent, while there would be no relief to the buyers of below 1600cc vehicles. The indirect collected taxes would continue to be the major source of revenue generation and inflation, they added. Arif N. Khan http://www.netvert.biz/fbo http://www.geocities.com/pinclub ------------------------------------ [2] From: "Arif N. Khan" <ank2000pk@yahoo.com> Date: Mon Jun 6, 2005 Subject: Purchasing Power of Pensioners reduced to 25% in Musharraft Reign ank2000pk It is expected that Government would announce 15% increase in salaries of public servants and 10% in pensioners of the Government. But last year the increase in Pension announced in budget was not allowed in the Government owned corporations like State Life Insurance Corporation of Pakistan. No reason is given but the employees federation got the greater increase than the governement servants but nothing was given for retired officers. . During the reign of President Musharraf prices have doubled and invest income under National Savings schemes has been reduced to almost 50%. Thus purchasing power of widows, retired persons and other in fixed income virtually is one fourth of what it used be when President Musharraf took over. ANK ------------------------- |
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