Wake-up call
 Income Tax System.
Quest for Missing Links
Pakistan Flood Response

YATA Alliance : - Tax Proposal                                Annexure 9-1
  1. Abstract: Majority of the third world countries face un-ending tax evasion problems giving rise to wide spread corruption in all segments of the society. Tax laws are cumbersome, tax authorities enjoy unilateral discretionary powers resulting into apprehensions among potential tax payers promoting re-course to illegal means. Tax payers prefer to evade procedures using illegal means. The overall un-surmountable web has resulted in untaxed wealth accumulation of enormous magnitude on one side and greatly contributing to the ever enhancing poverty of the common man on the other side.

    The proposed tax system is based on a simple mechanism appropriate for a population with little or no knowledge of tax system intricacies; eliminating all hurdles, barriers, apprehensions, loop-holes, etc.

    The first part contained herein presents the key features of the proposed system where as the second part which is to follow shall focus on implementation related aspects.

    The model is based on existing Pakistan scenario but can be considered for any other developing country with appropriate changes.

  2. Proposal Outlines:
  • Tax shall be based on income and/or facilities and assets being physically availed or being utilized by an individual.
  • Wealth having accumulated by an individual or being gifted to a third party shall not be of any concern and shall not be taxed as such unless the same is utilized in any manner.
  • Every significant income, facility or asset being utilized by any individual shall require fixed tax payment at post offices or banks against issuance of Tokens of specific value. The characteristic Token numbers shall be computerized using advanced software/systems thereby providing on the spot on line confirmation as and when verification is required.

  1. Personal Tax Tabulation - 01

  2. Group No Approximate Assets Yearly Income Yearly Payable Tax
    1 Below Rs. 0.1 million Below Rs. 50 K Rs. 10 (To be paid by the state for those who can not pay)
    2 Up to Rs.0.5 million Above Rs.50 K
    Up to Rs.120 K
    Rs. 100/-
    3 Up to Rs.1.0 million Above Rs120 K
    Up to Rs.250 K
    Rs. 2,500/-
    4 Up to Rs.15 millions Above Rs.250 K
    Up to Rs.1.2 millions
    Rs. 36,000/-
    5 Up to Rs.50 millions Above Rs.l.2 millions
    Up to Rs.12 millions
    Rs.6.0 millions
    6 Up to Rs.500 millions Above Rs.12 millions
    Up to Rs.120 millions
    Rs.8.4 millions
    7 Above 500 millions Above 120 millions To be treated individually by Tax Authorities.
    8 Foreign Assets (No limit)
    For Residents in Pakistan in addition to above
    taxes under para (1-7)
      5% of declared
    foreign Asset Value


3.1. For tax purposes no distinction between rented, owned or borrowed property, goods and services is visualized. Utilization of the same forms the basis for taxation.

3.2. Each slab represents a particular tax category irrespective of yearly income which may or may not exist.

3.3. For detailed category wise break-down of assets refer to Tabulation -02

3.4. Non-Token holders shall not be eligible to open post office/bank accounts and shall not avail other privileges available to Token holder.

3.5. Refer to additional requirements as contained in Tabulations 02 and 03.

  1. Authors: Yata Alliance is a group of professionals in-making, working on honorary and voluntary basis, with a charter to look into all issues contributing to the problems being faced by the country and come up with innovative concepts. This article is first of the series. It is intended to extend YATA Alliance analysis into under mentioned areas subject to availability of the relevant expertise.

    Governance related aspects.
    Disaster management/damage/loss control related aspects.
    Private/Public Corporate related aspects.
    Industrial/Agriculture related aspects.
    Developmental Plan related aspects.



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