Tax is money that people of a democratic country pays to their government. Taxes are of 2 types Direct taxation and Indirect taxation.
Direct Taxation : is simply the tax that levied on income/wealth of individual’s & Organisation’s
Indirect Taxation : Taxes that are place on Goods and services. E.g GST general sales Tax.
In Budget 2013 -14 very unexpected and unfriendly Taxation measures were taken. As a major revenue-generation measure announced in the federal budget, the standard rate of general sales tax has been raised from 16 percent to 17 percent to put direct burden of around Rs 55 billion on consumers.Instead if increasing direct taxation they have increased indirect taxes. This will effect the Pakistan’s economy and individuals daily routine.
If the base of Taxation in Pakistan is not rectified and Individual’s with high incomes are not subjected to Taxation ( big fishes ) then its a threat to Pakistan’s economy. The economy runs on the taxation and for long term survival involvement of FBR in Tax corruption Should have to be solved.
In recent budget it seems like only one side is protected Tax burden increased on low and middle class instead of upper class people who are enjoying lavish life .The major thing is to expand the taxpayers quantity by including more and more people to pay tax, but that’s not the rule to impose tax burden on working class which is previously subjected to taxation but to include those individual’s and industries that are not giving tax. There is a big example of Riaz Malik the billionaire & business tycoon has some asked him that does he pay Taxes or how much is he paying taxes according to the wealth and properties he owned.
Now another thing is that why people don’t like to pay tax is because they don’t trust the government, E.g if you compare the private and public hospitals from there you can judge whether the government is deserved or worthy to get taxes . Higher the taxation on working group discourages them from working or paying taxes.
Now another Question rises what is public getting after paying the huge amount of taxes , as you can see there are lot of problems like electricity , transportation , education, health and so many more hardships public is facing even they are paying taxes.
Overall Taxation problem has the same rank as electricity crisis that need to be solved. In many countries Progressive taxation is used to charge high taxes from high income earners to reduce social class gap but no such methods were used. Rich getting richer poor getting poorer.
Taxes should be imposed on the production on products that produce negative externalities and subsidies should be given on production of goods with positive externalities.
Another thing happened that the government impose GST increase before the bill is passed That’s totally is illegal.