Policy Research Institute of Market Economy, or PRIME Institute held a seminar in The Suleman Dawood Business School, LUMS, in Lahore. The Seminar titled Towards flat taxation, the new paradigm, unveiled a new breakthrough study aimed to increase tax revenues by lowering the tax rate, and simplifying the tax code.
Dr Ikram ul Haq and Huzaima Bukhari co authors of the study Towards Flat, Low Rate, Broad and Predictable Taxes were joined by Dr Salman Shah former Federal Finance Minister,Ali Salman, Founder and executive director of PRIME and Kamal Mian, chairman standing committee on Taxation at the Lahore Chambers of Commerce.
Dr Salman Shah stated that the current tax regime had many defects which could headdresses by flat taxes.
He said that concerted and consistent effort was required to reform the tax system, and improve the quality of collection services.
Salman Shah said that the government had achieved great results in the past through self Assesment schemes, but that progress was undone in favour of more coercive powers to the collection agencies.
Huzaima Bukhari stated that the tax code could be immensely less complicated. Citing her study, she proposed that income taxes on individuals be fixed at 10 percent, and on businesses at 20 percent. She also proposed a single stage sales tax and a single slab customs duty at 5 percent each. She said that her study shows revenues can be increased to Rs 5 trillion by making these changes.
Dr Ikram stated, that under current laws and system, voluntary tax compliance would be out of the question. He said that tax compliant businesses had to pay taxes at least 50 times annually.
He said that the current system creates incentives and opportunities for corruption.
On the occasion, Ali Salman announced PRIME Institute Center for Fiscal Reform. He said that CFR would work to secure the rights of the Pakistani Citizens for Fiscal Reform, by advocating responsible public spending, tax reform, and debt control.
April 28, 2016: The News reported as: Flat Tax Demanded
April 29, 2016: Business Recorder reported as: Tax proposals for Budget 2016-17 Need for new tax model