Why is the Salaried class paying more taxes?

Summary

The video script discusses the burden of increased taxes on individuals in Pakistan, particularly those working for multinationals, banks, or other companies. It contrasts the situation with India, highlighting the lower tax collection efficiency in Pakistan's provinces compared to Indian states. The script points out the irony of Pakistan's Punjab province, which despite having a significant revenue authority, contributes a meager amount to the federal tax collection. It also mentions the higher tax collections by entities like the New Delhi Municipal Corporation and the Uddisa state in India, emphasizing the need for tax reforms and efficient tax collection to alleviate the tax burden on citizens.

Takeaways

• 😣 The speaker feels a heavy tax burden due to the economic conditions in Pakistan.
• 💼 Post the last budget, there's been an increase in taxes for those working in multinationals, banks, or other companies.
• 📉 Provincial tax collection in Pakistan is significantly lower compared to India, with only 85% collection versus approximately 35% in India.
• 🏆 Haryana, a state in India, collects 87% of its tax revenue and contributes only 13% to the central government, while Punjab, the largest province in Pakistan, needs 88.1% of its revenue for itself.
• 🚀 The revenue authority in Punjab, Pakistan, collected 240 billion rupees in a fiscal year, whereas the Indian state of Uttar Pradesh, with half the population, collected over 3500 billion rupees.
• 🏙️ The New Delhi Municipal Corporation collected over 126 billion Pakistani rupees in taxes and fees in a fiscal year.
• 📉 Despite the 18th amendment granting more autonomy, provinces in Pakistan are not performing well in tax collection.
• 💸 The speaker suggests that the central government relies heavily on the provinces for tax revenue, which is not being collected efficiently.
• 📈 There's a call for increasing direct taxes on agriculture income, which is a significant move under IMF pressure.
• 🏠 The speaker metaphorically compares Pakistan to a household where the father is burdened with debt due to his actions, and the younger generation prefers to ask for money instead of working.

Q & A

Why does the speaker feel that salaried employees are unfairly taxed?

The speaker believes salaried employees are unfairly taxed because despite contributing significantly, provinces are not collecting sufficient taxes from other sources like agricultural income.

What is the tax collection issue in Pakistani provinces, according to the video?

Pakistani provinces are not serious about collecting taxes, relying heavily on federal funds instead of generating their own revenue, despite having the authority after the 18th amendment.

How does Punjab's tax revenue compare with that of the Indian state of Odisha?

Punjab collects only 240 billion Pakistani rupees, whereas Odisha, with a third of Punjab’s population, collects over 3,500 billion Pakistani rupees, 14.5 times more.

What is the comparison between Pakistan's provinces and Indian states in terms of tax collection?

Pakistani provinces contribute only 8.5% to total tax collection, while Indian states like Haryana collect 87% of their own tax revenue and depend less on federal funds.

Why do the speaker's comparisons focus on Indian states like Haryana and Odisha?

The speaker uses these comparisons to highlight how even less populous and less wealthy Indian states outperform Pakistani provinces in terms of tax collection and self-sufficiency.

What is the role of the 18th amendment in Pakistan’s provincial tax collection?

The 18th amendment gave more powers to the provinces, including tax collection responsibilities, but provinces have not effectively utilized these powers to generate significant revenue.

What is the significance of agricultural income tax in this discussion?

Agricultural income tax, which is under provincial jurisdiction, remains underutilized despite provinces having the legal framework to collect it. For example, Sindh barely collects any tax from its large agricultural sector.

Why does the speaker criticize provincial governments in Pakistan?

The speaker criticizes provincial governments for not taking responsibility for generating revenue through tax collection and instead depending on federal support.

How does the speaker describe the relationship between the federal government and provinces in Pakistan?

The speaker compares the relationship to a household where the father is in debt, and the grown sons demand more money without contributing to the household, reflecting the provinces’ dependence on federal funds.

What does the speaker suggest is the future of Pakistan if the current tax collection system remains unchanged?

The speaker suggests that if provinces continue relying on federal funds without generating their own revenue, Pakistan will face an uncertain and potentially bleak future, with many attempting to escape the 'sinking ship.'