AGL 38.54 Increased By ▲ 0.97 (2.58%)
AIRLINK 129.50 Decreased By ▼ -3.00 (-2.26%)
BOP 5.61 Decreased By ▼ -0.03 (-0.53%)
CNERGY 3.86 Increased By ▲ 0.09 (2.39%)
DCL 8.73 Decreased By ▼ -0.14 (-1.58%)
DFML 41.76 Increased By ▲ 0.76 (1.85%)
DGKC 88.30 Decreased By ▼ -1.86 (-2.06%)
FCCL 35.00 Decreased By ▼ -0.08 (-0.23%)
FFBL 67.35 Increased By ▲ 0.85 (1.28%)
FFL 10.61 Increased By ▲ 0.46 (4.53%)
HUBC 108.76 Increased By ▲ 2.36 (2.22%)
HUMNL 14.66 Increased By ▲ 1.26 (9.4%)
KEL 4.75 Decreased By ▼ -0.11 (-2.26%)
KOSM 6.95 Increased By ▲ 0.10 (1.46%)
MLCF 41.65 Decreased By ▼ -0.15 (-0.36%)
NBP 59.60 Increased By ▲ 1.02 (1.74%)
OGDC 183.00 Increased By ▲ 1.75 (0.97%)
PAEL 26.25 Increased By ▲ 0.55 (2.14%)
PIBTL 5.97 Increased By ▲ 0.14 (2.4%)
PPL 146.70 Decreased By ▼ -1.70 (-1.15%)
PRL 23.61 Increased By ▲ 0.39 (1.68%)
PTC 16.56 Increased By ▲ 1.32 (8.66%)
SEARL 68.30 Decreased By ▼ -0.49 (-0.71%)
TELE 7.23 Decreased By ▼ -0.01 (-0.14%)
TOMCL 35.95 Decreased By ▼ -0.05 (-0.14%)
TPLP 7.85 Increased By ▲ 0.45 (6.08%)
TREET 14.20 Decreased By ▼ -0.04 (-0.28%)
TRG 50.45 Decreased By ▼ -0.40 (-0.79%)
UNITY 26.75 Increased By ▲ 0.35 (1.33%)
WTL 1.21 No Change ▼ 0.00 (0%)
BR100 9,806 Increased By 37.8 (0.39%)
BR30 29,678 Increased By 278.1 (0.95%)
KSE100 92,304 Increased By 366.3 (0.4%)
KSE30 28,840 Increased By 96.6 (0.34%)

Industrial workers have demanded of the government to give allowances to them according to personal tax liability. Workers of several industries submitted proposals to Federation of Pakistan Chambers of Commerce and Industry for inclusion in trade body's budget proposals 2007-08.
The proposals stated that under the Repealed Ordinance 1979, workers enjoyed allowances to be offset against their personal tax liability. Therefore, "it is suggested that burden of salaried class should be mitigated by offering them allowances in terms of child education allowance, family allowance etc, to be offset against their salary income."
"This is necessary to rationalise and harmonise the tax structure of Pakistan with those countries where higher tax rates are well complimented by such relief," the proposals indicated. The salaried class should also be given adjustment against their tax liability in respect of allowable investment the limit of which should be enhanced.
In the previous budget, the concept of progressive taxation had been done away with and it is now based on flat rate taxation. This resulted in a negative impact when a person crosses one slab and enters the next slab as the increase in income of one rupee results in a much higher rate of tax amount.
It is suggested that the concept of marginal relief should be introduced in order to cater to the negative impact cast by the flat rate taxation and the amount of tax levied in such cases should not be more than 50 percent of increase in income. This would reduce the negative impact on lower as well as higher income class and will result in more equitable taxation.
The Finance Bill proposes to simplify the taxation pertaining to salary and there has been a major departure from the known method of taxation, which is based on the progression of income and seeks to withdraw all the exemptions with the exception of few available under the rules. The gross amount of taxable salary will now be charged to tax at the tax rate applicable on the bracket in which gross amount falls, meaning thereby the entire salary will be charged to tax at one rate.
"The amendment seems to be cosmetic and it is evident that the main prey is the lower and middle income class to whom no benefit has been given, rather they are under increased tax burden. The benefit is just an eye-wash when compared with the ones given to rich class."

Copyright Business Recorder, 2007

Comments

Comments are closed.