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I was shocked to read in daily Business Recorder, on 16 March 2011, that three "ordinances" have been promulgated, instead of acts, with immediate effect as the Senate and National Assembly are not in session. Where does democracy exist? We use so-called democracy under the umbrella of dictatorship.
The government claimed that Rs 53 billion will be fetched from these three ordinances, while the fact is that government will loose and vested interests will become rich and inflation will shoot up, like anything under these ordinances.
Under the sales tax and income tax regimes, it is the public and consumers who will pay Rs 53 billion plus and not the businessmen and industrialists. Ultimately, the government will not get anything from these measures rather the public will try to get rid off these excess taxes in the shape of sales tax, excise duty and income tax surcharge, and will encourage corruption, tax evasion and inflation. A worst chaos is expected.
Defects under these ordinances are as under:
1. Public and consumers will have to pay huge sales tax and not the businessmen and industrialists.
2. These new and enhanced taxes will add fuel to inflation and corruption and get nothing in return.
3. Black economy will be encouraged.
4. Public will buy from those shops exempted from sales tax and excise duty and documented shops will be forced to close.
5. Sales tax and federal excise monthly return are defective in the sense that it does not recognise refund of excise duty, as claimed as a result, businessmen and industrialists are loosing billions of rupees for many years.
6. The economy implosion is expected as export orders will be cancelled or will become defaulters due to the increasing cost of production as sales tax, excise duty and income tax surcharge will be charged by suppliers to exporters whose zero-rating have been withdrawn.
7. Income Tax Surcharge at 15% will be levied for income derived during July 2010 to June 2011, meaning this additional tax load will have to be paid within four months (March 2011 to June 2011) as advance tax, under Section 147 of the Income Tax Ordinance 2001, including the salaried taxpayers and on almost every thing, under the withholding regime. Everyone planning, budgeting, business and export commitments will totally fail. Further, how come it will be applicable on a period prior to promulgation, while retrospective laws had been abolished during the Bhutto regime.
8. Income Tax Surcharge will be levied on persons as advance tax , who will not have to pay any tax at the time of filing of tax return for the tax year 2011. How will that work?
It is advisable to withdraw all these proposed three so-called ordinances in the best interests of the nation and public to avoid an economic meltdown. Members in Senate and Assemblies are competent enough to revive the economy by taking appropriate measures, if their inputs are taken positively. If they do not accept the RGST and Income Tax Surcharge, there are reasons behind it and they are not enemies of Pakistan. They love Pakistan. What we lack now are good intentions, loyalty to the nation and sincerity.

Copyright Business Recorder, 2011

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