Reintroduction of Wealth Tax demanded

ISLAMABAD: Pakistan Economy Watch (PEW) on Friday said that reintroduction of across the board Wealth Tax on affluent class of society can help government generate enormous funds.

This will help shrink black economy, contain artificial hikes in property market, safeguard small investors, and help government it meet budgetary targets, said Dr. Murtaza Mughal, President, PEW. Alternatively, government can consider levying Wealth Tax on exempted income like agriculture, capital gains, asset gains, and remittances, it said.

Expenditure side is growing while income is sliding due to war on terror, performance of FBP and lack of financial discipline, he said while talking to tax and banking consultant Mohsin Rafique. In this scenario, he said, wealthy should contribute their share of taxes to the national exchequer for the greater cause of national development. Dr. Murtaza Mughal said that over six thousand people are involved in realty business in Clifton and DHA Karachi alone, meaning thereby that real property business can fetch around one trillion rupees if taxed properly. He said that Wealth Tax Act was abolished on the demand of a former finance minister, which was a great disservice to the nation that helped few amass wealth while pushing millions below the line of poverty. Repulsion of the Act triggered influx of enormous wealth in the stock and property markets, which was the beginning of unholy manoeuvrings in these sectors that resulted in miseries to the millions of small investors, he informed.

At the occasion, Mohsin Rafique said that majority of businesspersons show their enterprises in loss to avoid taxes while claiming income from exempted sectors to justify lavish living. People would invest million and billions in business but would not pay tax matching salary of their one employee, he said adding that lifestyle and tax contribution needs to be correlated. Stress on increase in ! power ta riff, petroleum prices and hiking rates of the tax would remain counterproductive, said Mr. Rafique adding that Wealth Tax, if introduced, will boost economy without need to impose controversial Value Added tax.