The Federal government is mulling to withdraw its tax exemption scheme that is benefitting only the elite class, said Finance Minister Asad Umar on Tuesday.
He made these remarks while addressing a launch ceremony of a book written by the country’s top economist Dr. Abdul Hafiz Pasha.
The book titled, ‘Pakistan – Agenda for Reforms’ is financed by a German institute Friedrich Ebert Stiftung under the theme of ‘Economy of Tomorrow.’
During his address, Asad Umar praised Dr. Hafiz as a visionary Pakistan’s number one economist.
While reflecting on the country’s current economic situation, Asad said the government was reviewing the tax exemptions being enjoyed by the elite class and that they were planning to withdraw them.
He maintained that not all the exemptions benefited the elite as the public at large was availing some of them as well.
On the occasion, Dr. Hafiz Pasha revealed that only income tax concessions for the elite class were estimated at Rs. 400 billion.
To which the finance minister said they were reviewing the tax scheme, adding that the government will abolish the withholding tax on banking transactions in the next budget.
The PML-N government had imposed a 0.6 percent tax on banking transactions for non-filers.
Umar said the tax was causing more damage to the economy than the benefit of Rs. 30 billion it generated for FBR.
Previously, Dr. Pasha had identified 41 types of different withholding taxes that were not contributing to the income tax collection – Umar hinted at withdrawing at least half of them in the coming budget.
He, however, endorsed the idea of wealth and capital gains tax saying that the residual wealth beyond a certain threshold should also be taxed.