Country collects taxes from its citizens in order to spend it for the betterment of their people. With this collection of the income tax, the government spends it on national defense, debt related services and the welfare-related issue of their citizens. But, here the thing that needs to be addressed is to make sure that the tax policy should be based upon equity, justice and fair treatment for each taxpayer.
Now when it comes in terms of Pakistan, its taxations system comprises of two divisions named Direct and Indirect taxes. As we have discussed earlier that the tax policy should be based on fair treatment. But, the situation is different in case of our country. There is no fair and equity-based tax collection. Whatever tax is being charged from a rich people is also being charged upon the poor. Let’s take a very simple and a common example of Our Recharge. Tax while recharging a card is being imposed the same on all of us. As per according to the recent report of Federal Board of Revenue (FBR), as a Pakistani citizen, every person is liable to pay 125,000 just to pay our debts to our foreign and domestic lenders.
In case of Pakistan, only poor people are subjected to pay heavy taxes and faces harsh taxation policies just to finance and facilitate the rich people. Poor people don’t even know the basic rights of paying taxes when in contrast-rich people can hire highly paid lawyers who can keep them away from paying the maximum amount of tax and provides new and secret ways of avoiding tax. Now, this is the responsibility of any government that they should make an autonomous organization which should be free from any political influence.
There should be a strict accountability mechanism to check either an official or unofficial is involved in corrupt practices. The government should mechanized a system where this should be important to make sure that everyone is supposed to pay tax as per according to one’s income, capacity, and ability to pay tax. Now here, another most important thing that a government needs to address is to restore the public trust in the taxation system. Pakistani Government needs to realize that pour current Tax Collection Policy is very weak, it has got much of loopholes,, which needs to be filled as soon as possible for the prosperity and development of the economy.