Who Owns Pakistan - Yimg

Chapter Four - Pakistan's Tax Web
Pakistan today has a mind-boggling taxation system that defies comprehension
of the average citizens and experts alike. In 1990, Karachi Chamber of
Commerce and Industry had established that the industry was subjected to 50
direct and indirect taxes but the statement of Senator Ilyas Bilour, President
PFCCI at the Businessmen Conference in Islamabad on March 25, 1997 that 37
govt deprtments and agnencies were collecting taxes gives a meaure of the
proliferation of taxes that has taken place in Pakistan.
It was not in the province of this book to catalogue the taxes being collected by
the federal, provincial and local governments but I have identified 70 major taxes
to which consumers and producers are subjected. In addition there are host of
specific taxes like a Research and Development Levy, Drug Manufacturing
Licence Fee and Drug Registration Fee. It can be said safely that there are at
least 100 taxes in vogue in Pakistan.
It is not the proliferation of taxes that is mind-boggling. It is the exemptions to
these taxes for the privileged, their duplication and triplication for the common
man, the method of their collection and making refunds, utilization of specificpurpose
taxes that is mind-boggling. There is an education cess levied by the
federal govt, another education cess is collected by provincial govts. The Central
Excise Duty (CED) is being collected on the telephone bills by Pakistan
Telecommunication Corporation but Baluchistan govt introduced a duty on
telephone calls in the 1996-97 budget. Federal govt has levied a Tobacco cess
but in the 1997-98 budget the provincial govt of NWFP levied a Rs one per Kilo
Tobacco Cess. Civil Aviation Authority collects an airport tax. There is a Workers
Participation Fund and another Workers Welfare Fund.
There are federal taxes like Ushr being collected by the provincial govts,
provincial taxes like motor vehicle tax being collected by the federal govt. Local
taxes like the property tax is being collected by the provincial govt and
reimbursed to municipal corporation and committees.
An appeal by the leading hotels and restaurants of Lahore in the national
newspapers after the 1997-98 budget exemplifies the multiplication of taxes in
Pakistan.
"In the recent Punjab provincial budget, an additional tax of 10%
has been levied on the posh restaurants and international hotels of
the province. This is in addition to 12.5% Central Excise Duty and
5% provincial tax levied on July 1, 1996. Cumulatively, these taxes
add up to about 30% which, by any national and international
standards is extremely high", the appeal said.
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