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Increasing gap between rich and poor catalysing extremism and terrorism in Pakistan

Pakistan is suffering from regressive tax system where seventy per cent of the taxes are collected through indirect taxes, which increases the gap between rich and poor, develop sense of deprivation among the later, consequently catalysing extremism and terrorism, believes Dr. Murtaza Mughal, President Pakistan Economy Watch.

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Mughal added that just distribution of wealth is imperative to win ongoing war against militants and extremists.

He said that FBR has failed to enforce a proper direct taxation system which is benefitting the elite and making live difficult of the poor.

Mughal pointed that there are around 140 million mobile subscribers paying around 34.5 percent as income and sales tax despite the fact that the income 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 system is supporting elite that have never considered discharging national obligations.

Mughal said that imposition of 22 percent sales tax on petroleum products is illegal and unconstitutional while the claim of FBR to collect Rs 2266.3 billion rupees in 2013-14 is highly exaggerated.

In fact FBR collected 2254.5 billion while the boost in revenue collection was trickery, blocking refunds of over a billion and other tactics for which tax collectors are popular.

Rejecting imposition of additional taxes to show improved collections, Dr. Mughal said that FBR continue to support rich on the cost of poor widening the income gap which is fanning extremism and lawlessness.

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Increasing gap between rich and poor catalysing extremism and terrorism in Pakistan

by Bilal