"\u003chtml xmlns:o=\"urn:schemas-microsoft-com:office:office\"\r\nxmlns:w=\"urn:schemas-microsoft-com:office:word\"\r\nxmlns=\"http://www.w3.org/TR/REC-html40\"\u003e\r\n\r\n\u003chead\u003e\r\n\u003cmeta http-equiv=Content-Type content=\"text/html; charset=windows-1252\"\u003e\r\n\u003cmeta name=ProgId content=Word.Document\u003e\r\n\u003cmeta name=Generator content=\"Microsoft Word 11\"\u003e\r\n\u003cmeta name=Originator content=\"Microsoft Word 11\"\u003e\r\n\u003clink rel=File-List href=\"2012J38_files/filelist.xml\"\u003e\r\n\u003ctitle\u003eA CRITICAL ANALYSIS OF INCOME TAX ORDINANCE, 2001\u003c/title\u003e\r\n\u003c!--[if gte mso 9]\u003e\u003cxml\u003e\r\n \u003co:DocumentProperties\u003e\r\n  \u003co:Author\u003eAdil Hafeez\u003c/o:Author\u003e\r\n  \u003co:Template\u003eNormal\u003c/o:Template\u003e\r\n  \u003co:LastAuthor\u003eAdil Hafeez\u003c/o:LastAuthor\u003e\r\n  \u003co:Revision\u003e2\u003c/o:Revision\u003e\r\n  \u003co:TotalTime\u003e0\u003c/o:TotalTime\u003e\r\n  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Section1\r\n\t{size:8.5in 11.0in;\r\n\tmargin:1.0in 1.25in 1.0in 1.25in;\r\n\tmso-header-margin:.5in;\r\n\tmso-footer-margin:.5in;\r\n\tmso-paper-source:0;}\r\ndiv.Section1\r\n\t{page:Section1;}\r\n--\u003e\r\n\u003c/style\u003e\r\n\u003c!--[if gte mso 10]\u003e\r\n\u003cstyle\u003e\r\n /* Style Definitions */\r\n table.MsoNormalTable\r\n\t{mso-style-name:\"Table Normal\";\r\n\tmso-tstyle-rowband-size:0;\r\n\tmso-tstyle-colband-size:0;\r\n\tmso-style-noshow:yes;\r\n\tmso-style-parent:\"\";\r\n\tmso-padding-alt:0in 5.4pt 0in 5.4pt;\r\n\tmso-para-margin:0in;\r\n\tmso-para-margin-bottom:.0001pt;\r\n\tmso-pagination:widow-orphan;\r\n\tfont-size:10.0pt;\r\n\tfont-family:\"Times New Roman\";\r\n\tmso-ansi-language:#0400;\r\n\tmso-fareast-language:#0400;\r\n\tmso-bidi-language:#0400;}\r\n\u003c/style\u003e\r\n\u003c![endif]--\u003e\r\n\u003c/head\u003e\r\n\r\n\u003cbody lang=EN-US style=\u0027tab-interval:.5in;text-justify-trim:punctuation\u0027\u003e\r\n\r\n\u003cdiv class=Section1\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal align=center style=\u0027text-align:center;mso-pagination:none;\r\nmso-layout-grid-align:none;text-autospace:none\u0027\u003e\u003cb\u003eA CRITICAL ANALYSIS OF\r\nINCOME TAX ORDINANCE, 2001\u003co:p\u003e\u003c/o:p\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal align=center style=\u0027text-align:center;mso-pagination:none;\r\nmso-layout-grid-align:none;text-autospace:none\u0027\u003e\u003cb\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal align=center style=\u0027text-align:center;mso-pagination:none;\r\nmso-layout-grid-align:none;text-autospace:none\u0027\u003e\u003cb\u003eBy\u003co:p\u003e\u003c/o:p\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal align=center style=\u0027text-align:center;mso-pagination:none;\r\nmso-layout-grid-align:none;text-autospace:none\u0027\u003e\u003cb\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal align=center style=\u0027text-align:center;mso-pagination:none;\r\nmso-layout-grid-align:none;text-autospace:none\u0027\u003e\u003cb\u003eM. Anum Saleem\u003csup\u003e1\u003c/sup\u003e\r\nand Ussama Ahmad Khan\u003csup\u003e2\u003c/sup\u003e \u003co:p\u003e\u003c/o:p\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\ntext-autospace:none\u0027\u003e\u003cb\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\ntext-autospace:none\u0027\u003e\u003cb\u003eINTRODUCTION\u003co:p\u003e\u003c/o:p\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003eTax legislation is of concern to governments across\r\nthe globe because of its effects on economic activity in addition to its fiscal\r\n\u003cspan style=\u0027letter-spacing:-.2pt\u0027\u003eimportance. This paper seeks to highlight\r\nhow the tax rates contained in\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e_________________________\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003csup\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e1\u003c/span\u003e\u003c/sup\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.2pt\u0027\u003e M. A. ECONOMICS (PUNJAB), LLM (TORONTO), ADVOCATE\r\nHIGH COURT, ADJUNCT FACULTY, LUMS, PARTNER, SALEEM AND SHIRAZ, ADVOCATES AND\r\nLEGAL COUNSELS\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003csup\u003e2\u003c/sup\u003e\u003cspan style=\u0027mso-tab-count:1\u0027\u003e           \u003c/span\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.2pt\u0027\u003eBSC Final year student at LUMS\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003ethe Income Tax\r\nOrdinance, 2001 cause injustice to tax payers, are fiscally inappropriate and\r\naffect economic activity negatively. In the course of the paper, comparisons to\r\nvarious countries, their tax policies and tax rates are made.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eCURRENT STATE OF\r\nTHE ECONOMY\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003ePakistan, through\r\n65 years of its existence has suffered on the economic front due to several\r\nreasons. Among the most important are the political situation, massive\r\ncorruption and inappropriate economic policies. Governments throughout these\r\nyears have failed on most accounts to achieve a budget surplus. This is despite\r\nof the fact that Pakistan has been endowed with numerous natural resources and\r\nis strategically located. Yet the inclination of the government to exploit the\r\nresources for the country\u0027s benefit has been primarily missing. Corruption at\r\nall levels of hierarchy in government departments across the. country has been\r\na major player in sinking the ship that could have been a world leader. Undue\r\nemphasis on politics has caused the economy to suffer further\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003ePakistan currently\r\nfaces a budget deficit of Rs. 1.4 trillion for the fiscal year 2011-2012. Nine\r\nmonths through the fiscal year the government has already spent 91 % of the\r\ntotal annual budget as reported by The Express Tribune. The deficit is a huge\r\n6.6% of the total economy and is all set to increase further. \u0026quot;The\r\ndevelopment comes on the heels of the government\u0027s decision to revise downwards\r\nthe target of tax collection by Rs.23 billion after the authorities missed the\r\nmonthly targets for two consecutive months. The trend indicates that the\r\nfederal government \u003c/span\u003eis \u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eset to miss all\r\nits budgetary targets.\u0026quot;\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eSuch is the\r\nfledgling state of Revenue collection that FBR had to revise its revenue\r\ncollection objectives on several occasions before settling on a way off the\r\nmark figure. Initially the aim was to collect a total of Rupees 1667 billion, a\r\ntarget which was later cut down to Rupees 1604 billion and then further dragged\r\ndown to Rupees 1588 billion. Despite the continuous decreases, FBR managed to\r\ncollect only Rupees 1558 Billion, \u003c/span\u003ewell \u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eoff\r\nthe initial 1667 billion mark. Out of the figure collected, only 602 billion\r\nwas from direct tax and the rest indirect. It is suspected that even the 602\r\nbillion is an inflated figure, reflecting a meager figure of 400 billion only.\r\nExperts say that the FBR can squeeze out as much as Rs. 6-8 trillion in tax\r\nfrom the economy but chooses not to, so that the poor are not further burdened\r\nby an influx of indirect taxes.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003csup\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e____________________________\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/sup\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003csup\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/sup\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003csup\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e3 \u003c/span\u003e\u003c/sup\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.2pt\u0027\u003eThe figures above have been obtained from Shabaz\r\nRana\u0027s article \u0026quot;Spendthrift ways: Govt. consumes 91% of the budget in nine\r\nmonths\u0026quot; published in The Express Tribune on 4 May 2012.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eAccording to\r\nvarious studies (see the latest report of World Bank), an estimated 42 per cent\r\nof our total national income belongs to only top 20% of the population-36\r\nmillion persons have a combined income of $75.6 billion or a per capita income\r\nof $2,100 i.e., twice the national average. Nearly 27% of the national income\r\ngoes to just 18 million people-whose per capita income is $2,700.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eSince the poorest\r\n10 per cent of the population receives only 4 percent of the total income,\r\ntheir income per head is only $400 per annum.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003ctable class=MsoNormalTable border=0 cellspacing=0 cellpadding=0\r\n style=\u0027margin-left:.25pt;border-collapse:collapse;mso-padding-alt:0in 0in 0in 0in\u0027\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:0;mso-yfti-firstrow:yes\u0027\u003e\r\n  \u003ctd width=205 valign=top style=\u0027width:153.65pt;border:solid windowtext 1.0pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003ePopulation (%)\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=163 valign=top style=\u0027width:122.15pt;border:solid windowtext 1.0pt;\r\n  border-left:none;mso-border-left-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eIncome (%)\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=209 valign=top style=\u0027width:156.5pt;border:solid windowtext 1.0pt;\r\n  border-left:none;mso-border-left-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003ePer capita Income\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:1\u0027\u003e\r\n  \u003ctd width=205 valign=top style=\u0027width:153.65pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=163 valign=top style=\u0027width:122.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=209 valign=top style=\u0027width:156.5pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:2\u0027\u003e\r\n  \u003ctd width=205 valign=top style=\u0027width:153.65pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003etop 20%\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=163 valign=top style=\u0027width:122.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e42%\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=209 valign=top style=\u0027width:156.5pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e$2,100_\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:3\u0027\u003e\r\n  \u003ctd width=205 valign=top style=\u0027width:153.65pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003etop 10%\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=163 valign=top style=\u0027width:122.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e27%\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=209 valign=top style=\u0027width:156.5pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e$2,700\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:4;mso-yfti-lastrow:yes\u0027\u003e\r\n  \u003ctd width=205 valign=top style=\u0027width:153.65pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003epoorest 10%\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=163 valign=top style=\u0027width:122.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e4%\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=209 valign=top style=\u0027width:156.5pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e$400\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n\u003c/table\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eAs bad as it gets,\r\nthe inefficiency of FBR in collecting taxes can be judged from the appalling\r\nfact that out of the 584 billion Rupees tax collected only 18 billion (3%) was\r\ncollected through demand, and the rest 97% was collected through Advanced Tax and\r\nWith Holding Tax.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eEven in the domain\r\nof Indirect Taxes, FBR does not fare too well. It collected Rs.684.2 billion\r\nfrom sales tax (Rs.308.7 billion on imports and Rs. 375.5 on domestic\r\nsupplies), out of which share of petroleum products was about 39%. The\r\ncontribution of petroleum and telecom sectors in domestic sales tax collection\r\nis 60%. This exposes the effectiveness of FBR in implementing sales tax across\r\nthe board. Resultantly, the gap in collection is nearly 200% and there is also\r\nillegal enrichment as sales tax collected on local supplies from the consumers\r\nnever reaches the government treasury due to unholy alliance between the\r\nunscrupulous businessmen and corrupt officials.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eThe recent study of\r\nWorld Bank suggests that revenue losses under the head of customs were not less\r\nthan US$ 30 billion.\u0027\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTHE INCOME TAX\r\nORDINANCE, 2001\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eThe Income Tax\r\nOrdinance, 2001 was made operative on 1st July, 2002 and has since been a\r\nsource of criticism by tax payers, financial managers and tax lawyers.\r\n\u0026quot;After 10 years, there is a consensus in all circles - officials and\r\nprofessions - that the new law, aimed at simplifying income tax enactment, has\r\nbeen a total failure to achieve the much desired goal of inducing foreign\r\ndirect investment and rapid industrial growth.\u0026quot; \u003csup\u003e5\u003co:p\u003e\u003c/o:p\u003e\u003c/sup\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eIn order to analyze\r\nthe tax rates and the associated policies we divide the Income Tax Ordinance\r\ninto two broad categories: (i) the normal tax regime, (ii) the presumptive tax\r\nregime. The normal tax regime entails to five different sources of income: Salary,\r\nBusiness Income, Capital Gain Property and Other sources. It is interesting to\r\nnote that the Income Tax Ordinance envisages numerous different tax rates for\r\nthe above mentioned categories. The rates specifically are contained in the\r\nFirst Schedule to the Income Tax Ordinance.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eNORMAL TAX\r\nREGIME\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eThe Income Tax\r\nOrdinance divides the income of all persons into different heads. Section 11 of\r\nthe Income Tax Ordinance ,states, \u0026quot;For the purpose of the imposition of\r\ntax and the computation of total income, all income shall be classified under\r\nthe following heads, namely:-\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e(a) Salary;\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e(b) Income from\r\nProperty\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e(c) Income from\r\nBusiness\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e(d) Capital Gains;\r\nand\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e(e) Income from\r\nother sources.\u0026quot;\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eSEPARATE BLOCS\r\nOF INCOME\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eThe first schedule\r\nto the Income Tax Ordinance is divided into 4 parts and 30 divisions each of\r\nwhich is used to determine the rate of tax applied to different heads of income\r\nfor different persons. The first thing \u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e____________________________\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003csup\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/sup\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003csup\u003e4 \u003c/sup\u003eThe figures in the above section have\r\nbeen obtained from Huzaima Bukhari and Dr. Ikramul Hag\u0027s article \u0026quot;Devising\r\nan equitable tax structure\u0026quot; published in the \u003cspan style=\u0027letter-spacing:\r\n.2pt\u0027\u003eHuzaima and Ikram Tax Journal (February 5, 2012).\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003csup\u003e5\u003c/sup\u003e Huzaima Bukhari and Dr. Ikramul Haq\u003csup\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.2pt\u0027\u003e..\u003c/span\u003e\u003c/sup\u003eTax Reforms\u0026quot; \u003cspan\r\nstyle=\u0027letter-spacing:.2pt\u0027\u003eThe Business Recorder.30 \u003c/span\u003eMarch 2012\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eto note in the\r\nnormal tax regime of the Income Tax Ordinance is that it taxes income from\r\nproperty among others as separate sources of income for all persons. Tax rates\r\nin the different schedules are not harmonized and result in different tax\r\nliability for the same amount of income. In doing so it essentially reduces the\r\namount of tax charged to a person earning a major part of his income in the\r\nform of rent compared to a person earning a major part of his income from business\r\nalthough the total income under all heads may essentially be the same. This\r\nhappens primarily because of taxing property income \u003c/span\u003eas \u003cspan\r\nstyle=\u0027letter-spacing:.1pt\u0027\u003ea separate bloc. However if that is to remain the\r\ncase, the different tax rates and tax brackets contained in the first schedule\r\nshould be harmonized. A numerical example of the injustice caused by these tax\r\nrates is contained in the following table:\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cdiv align=center\u003e\r\n\r\n\u003ctable class=MsoNormalTable border=0 cellspacing=0 cellpadding=0\r\n style=\u0027border-collapse:collapse;mso-padding-alt:0in 0in 0in 0in\u0027\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:0;mso-yfti-firstrow:yes\u0027\u003e\r\n  \u003ctd width=236 valign=top style=\u0027width:176.85pt;border:solid windowtext 1.0pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=159 valign=top style=\u0027width:119.3pt;border:solid windowtext 1.0pt;\r\n  border-left:none;mso-border-left-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003ePerson A\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=182 valign=top style=\u0027width:136.15pt;border:solid windowtext 1.0pt;\r\n  border-left:none;mso-border-left-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003ePerson B\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:1\u0027\u003e\r\n  \u003ctd width=236 valign=top style=\u0027width:176.85pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=159 valign=top style=\u0027width:119.3pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=182 valign=top style=\u0027width:136.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:2\u0027\u003e\r\n  \u003ctd width=236 valign=top style=\u0027width:176.85pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eIncome from Business\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=159 valign=top style=\u0027width:119.3pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e600000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=182 valign=top style=\u0027width:136.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e1000000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:3\u0027\u003e\r\n  \u003ctd width=236 valign=top style=\u0027width:176.85pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=159 valign=top style=\u0027width:119.3pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=182 valign=top style=\u0027width:136.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:4\u0027\u003e\r\n  \u003ctd width=236 valign=top style=\u0027width:176.85pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eIncome From Rent\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=159 valign=top style=\u0027width:119.3pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e1000000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=182 valign=top style=\u0027width:136.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e600000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:5\u0027\u003e\r\n  \u003ctd width=236 valign=top style=\u0027width:176.85pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=159 valign=top style=\u0027width:119.3pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=182 valign=top style=\u0027width:136.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:6\u0027\u003e\r\n  \u003ctd width=236 valign=top style=\u0027width:176.85pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eTotal Income\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=159 valign=top style=\u0027width:119.3pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e1600000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=182 valign=top style=\u0027width:136.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e1600000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:7\u0027\u003e\r\n  \u003ctd width=236 valign=top style=\u0027width:176.85pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eTax rate applicable on\r\n  Business Income\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=159 valign=top style=\u0027width:119.3pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e10%\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=182 valign=top style=\u0027width:136.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e15%\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:8\u0027\u003e\r\n  \u003ctd width=236 valign=top style=\u0027width:176.85pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eTax rate applicable on\r\n  Rent Income\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=159 valign=top style=\u0027width:119.3pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eRs.12,500+ 7.5% of\r\n  income over and above 400000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=182 valign=top style=\u0027width:136.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eRs.57,500+ 10% of\r\n  income over and above 1000000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:9\u0027\u003e\r\n  \u003ctd width=236 valign=top style=\u0027width:176.85pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eTax on Business Income\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=159 valign=top style=\u0027width:119.3pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e60000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=182 valign=top style=\u0027width:136.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e150000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:10\u0027\u003e\r\n  \u003ctd width=236 valign=top style=\u0027width:176.85pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eTax on Rental Income\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=159 valign=top style=\u0027width:119.3pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e57500\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=182 valign=top style=\u0027width:136.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e27500\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:11\u0027\u003e\r\n  \u003ctd width=236 valign=top style=\u0027width:176.85pt;border-top:none;border-left:\r\n  solid windowtext 1.0pt;border-bottom:none;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-top-alt:solid windowtext .75pt;\r\n  mso-border-left-alt:solid windowtext .75pt;mso-border-right-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eTotal Tax liability\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=159 valign=top style=\u0027width:119.3pt;border:none;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-right-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e117500\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=182 valign=top style=\u0027width:136.15pt;border:none;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-right-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e177500\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:12;mso-yfti-lastrow:yes\u0027\u003e\r\n  \u003ctd width=236 valign=top style=\u0027width:176.85pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-left-alt:solid windowtext .75pt;mso-border-bottom-alt:\r\n  solid windowtext .75pt;mso-border-right-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=159 valign=top style=\u0027width:119.3pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-left-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-bottom-alt:solid windowtext .75pt;mso-border-right-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=182 valign=top style=\u0027width:136.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-left-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-bottom-alt:solid windowtext .75pt;mso-border-right-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n\u003c/table\u003e\r\n\r\n\u003c/div\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eWe can see from the\r\ntable that although the total income of both person A and person B are same.\r\nPerson B pays a higher amount of tax. The effective rate of tax of person B is\r\nalmost 4% higher than the effective rate of tax for person A.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eSALARIED CLASS\r\nAND NON-SALARIED CLASS INDIVIDUALS \u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eDivision 1 of Part\r\nI of the first schedule establishes the rates of \u003c/span\u003e\u003cspan style=\u0027letter-spacing:\r\n.2pt\u0027\u003etax for individuals. Clause 1 sets out a table for the tax rates to be\r\n\u0026quot;imposed on the taxable income of every individual except a salaried\r\ntaxpayer\u0026quot;. Clause lA establishes the tax rates for individuals \u0026quot;where\r\nthe income of an individual chargeable under the head \u0026quot;salary\u0026quot;\r\nexceeds fifty percent of \u003c/span\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003ehis \u003c/span\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.2pt\u0027\u003etaxable income\u0026quot;. Although for both types of\r\nindividuals the minimum level of income for being taxed remains the same i.e.\r\nRs.350,000 the lowest rate applicable on a salaried person is 1.5% while it is\r\n7.5% for an individual who falls under Clause 1. Such a difference in tax rate\r\nmeans that for the same level of taxable income the tax paid by a salaried\r\nperson would be 5 times less than the income tax paid by an individual whose\r\nmain source of income is not salary. The case is similar for higher levels of\r\nincome, where the highest rate of tax on an individual is 25% and for a\r\nsalaried person it is 20%.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cdiv align=center\u003e\r\n\r\n\u003ctable class=MsoNormalTable border=0 cellspacing=0 cellpadding=0\r\n style=\u0027border-collapse:collapse;mso-padding-alt:0in 0in 0in 0in\u0027\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:0;mso-yfti-firstrow:yes\u0027\u003e\r\n  \u003ctd width=290 valign=top style=\u0027width:217.4pt;border:solid windowtext 1.0pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=155 valign=top style=\u0027width:116.15pt;border:solid windowtext 1.0pt;\r\n  border-left:none;mso-border-left-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003ePerson X\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=131 valign=top style=\u0027width:98.5pt;border:solid windowtext 1.0pt;\r\n  border-left:none;mso-border-left-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003ePerson Y\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:1\u0027\u003e\r\n  \u003ctd width=290 valign=top style=\u0027width:217.4pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eIncome from Business\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=155 valign=top style=\u0027width:116.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e270000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=131 valign=top style=\u0027width:98.5pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e500000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:2\u0027\u003e\r\n  \u003ctd width=290 valign=top style=\u0027width:217.4pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eIncome From Salary\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=155 valign=top style=\u0027width:116.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e500000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=131 valign=top style=\u0027width:98.5pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e270000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:3\u0027\u003e\r\n  \u003ctd width=290 valign=top style=\u0027width:217.4pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTotal Income\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=155 valign=top style=\u0027width:116.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e770000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=131 valign=top style=\u0027width:98.5pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e770000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:4\u0027\u003e\r\n  \u003ctd width=290 valign=top style=\u0027width:217.4pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTax rate applicable on\r\n  Income\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=155 valign=top style=\u0027width:116.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e7.50%\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=131 valign=top style=\u0027width:98.5pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e15%\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:5\u0027\u003e\r\n  \u003ctd width=290 valign=top style=\u0027width:217.4pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTax If No marginal\r\n  Relief Given\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=155 valign=top style=\u0027width:116.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e57,750\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=131 valign=top style=\u0027width:98.5pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e115,500\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:6\u0027\u003e\r\n  \u003ctd width=290 valign=top style=\u0027width:217.4pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTax rate after\r\n  marginal relief\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=155 valign=top style=\u0027width:116.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e6% of income up to\r\n  Rs.750,000. \u003c/span\u003e\u003cspan style=\u0027letter-spacing:1.4pt\u0027\u003e301\u003c/span\u003e\u003cspan\r\n  style=\u0027letter-spacing:.2pt\u0027\u003e of income above Rs.750,000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=131 valign=top style=\u0027width:98.5pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eNo Marginal Relief\r\n  Given\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:7;mso-yfti-lastrow:yes\u0027\u003e\r\n  \u003ctd width=290 valign=top style=\u0027width:217.4pt;border:solid windowtext 1.0pt;\r\n  border-top:none;mso-border-top-alt:solid windowtext .75pt;mso-border-alt:\r\n  solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTotal after Marginal\r\n  relief\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=155 valign=top style=\u0027width:116.15pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e51,000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=131 valign=top style=\u0027width:98.5pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e115,500\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n\u003c/table\u003e\r\n\r\n\u003c/div\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eAlso important in\r\nthe analysis of the injustice done by the Income\u003csup\u003e,\u003c/sup\u003e Tax Ordinance are\r\nthe tax brackets drawn \u003c/span\u003eup \u003cspan style=\u0027letter-spacing:.2pt\u0027\u003ein the two\r\ntables. There are a total of six tax brackets in the table in clause 1 and a\r\nwhopping 17 tax brackets in clause 1A allowing tax rates to increase much more\r\nslowly than in the first table. For example for \u003c/span\u003ean \u003cspan\r\nstyle=\u0027letter-spacing:.2pt\u0027\u003eindividual who is not a salaried person an increase\r\nin income from 750000 to 1000000 would mean an increase of tax rate by 5%. If\r\nthe same individual was a salaried person the tax rate would rise by a mere\r\n1.5%.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eIt is important to\r\nalso note that the salaried person is granted marginal relief under Clause 1A,\r\nallowing him to apply a lower tax bracket if his income falls into a higher tax\r\nbracket by a small amount. No such provision is made for the non-salaried\r\ntaxpayer who already bears the burden in the form of fewer tax brackets and\r\ncomparatively higher tax rates.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cdiv align=center\u003e\r\n\r\n\u003ctable class=MsoNormalTable border=0 cellspacing=0 cellpadding=0\r\n style=\u0027border-collapse:collapse;mso-padding-alt:0in 0in 0in 0in\u0027\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:0;mso-yfti-firstrow:yes;mso-row-margin-right:236.5pt\u0027\u003e\r\n  \u003ctd width=142 colspan=2 valign=top style=\u0027width:106.6pt;border:none;\r\n  border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=119 colspan=2 valign=top style=\u0027width:88.9pt;border:none;\r\n  border-bottom:solid windowtext 1.0pt;mso-border-bottom-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd style=\u0027mso-cell-special:placeholder;border:none;border-bottom:solid windowtext 1.0pt\u0027\r\n  width=315 colspan=3\u003e\u003cp class=\u0027MsoNormal\u0027\u003e\u0026nbsp;\u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:1\u0027\u003e\r\n  \u003ctd width=119 valign=top style=\u0027width:89.25pt;border-top:none;border-left:\r\n  solid windowtext 1.0pt;border-bottom:solid windowtext 1.0pt;border-right:\r\n  none;mso-border-top-alt:solid windowtext .75pt;mso-border-top-alt:solid windowtext .75pt;\r\n  mso-border-left-alt:solid windowtext .75pt;mso-border-bottom-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=119 colspan=2 valign=top style=\u0027width:88.9pt;border:none;\r\n  border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .75pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-bottom-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eTax Brackets\u003c/span\u003e\u003cspan\r\n  style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=87 colspan=2 valign=top style=\u0027width:65.15pt;border-top:none;\r\n  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-top-alt:solid windowtext .75pt;\r\n  mso-border-bottom-alt:solid windowtext .75pt;mso-border-right-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=120 valign=top style=\u0027width:90.05pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTax rate\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=132 valign=top style=\u0027width:98.65pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eInter bracket Marginal\r\n  Tax burden\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:2\u0027\u003e\r\n  \u003ctd width=119 valign=top style=\u0027width:89.25pt;border-top:none;border-left:\r\n  solid windowtext 1.0pt;border-bottom:solid windowtext 1.0pt;border-right:\r\n  none;mso-border-top-alt:solid windowtext .75pt;mso-border-top-alt:solid windowtext .75pt;\r\n  mso-border-left-alt:solid windowtext .75pt;mso-border-bottom-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e0\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=119 colspan=2 valign=top style=\u0027width:88.9pt;border:none;\r\n  border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .75pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-bottom-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u0026lt; x \u0026lt;\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=87 colspan=2 valign=top style=\u0027width:65.15pt;border-top:none;\r\n  border-left:none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-top-alt:solid windowtext .75pt;\r\n  mso-border-bottom-alt:solid windowtext .75pt;mso-border-right-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e350000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=120 valign=top style=\u0027width:90.05pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e0.00%\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=132 valign=top style=\u0027width:98.65pt;border-top:none;border-left:\r\n  none;border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  mso-border-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003cspan\r\n  style=\u0027mso-spacerun:yes\u0027\u003e \u003c/span\u003e\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:3\u0027\u003e\r\n  \u003ctd width=119 valign=top style=\u0027width:89.25pt;border-top:none;border-left:\r\n  solid windowtext 1.0pt;border-bottom:solid windowtext 1.0pt;border-right:\r\n  none;mso-border-top-alt:solid windowtext .75pt;mso-border-top-alt:solid windowtext .75pt;\r\n  mso-border-left-alt:solid windowtext .75pt;mso-border-bottom-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e350000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=119 colspan=2 valign=top style=\u0027width:88.9pt;border:none;\r\n  border-bottom:solid windowtext 1.0pt;mso-border-top-alt:solid windowtext .75pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-bottom-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan 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style=\u0027border:none\u0027\u003e\u003c/td\u003e\r\n  \u003ctd width=132 style=\u0027border:none\u0027\u003e\u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003c![endif]\u003e\r\n\u003c/table\u003e\r\n\r\n\u003c/div\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eInterestingly such\r\nan individual is subjected to Rs.12,500. in additional tax for approximately\r\nthe same level of income if it falls into the third bracket by a single rupee.\r\nThe injustice goes even further as depicted \u003c/span\u003ein \u003cspan style=\u0027letter-spacing:\r\n.2pt\u0027\u003ethe table above. The methodology applied to business income and salary\r\nhowever does not apply to Income from property. Division VI of Part I of the\r\nFirst Schedule establishes the tax rates for income from property.\r\nInterestingly the tax rates apply to discrete slabs of income rather than\r\nincome as a whole.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eOn a global front\r\nthe tax policy regarding taxing salaried and non-salaried taxpayers separately\r\nis unique. Countries like Singapore, UK, Malaysia or India do not employ such a\r\nsystem. The \u003c/span\u003epolicy \u003cspan style=\u0027letter-spacing:.2pt\u0027\u003ehowever has severe\r\nrepercussions in terms of restricting and discouraging small scale startups and\r\nsole proprietorships. A comparison across countries reveals the following\r\npolicies\u003csup\u003e6\u003c/sup\u003e:--\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify;mso-pagination:\r\nnone;mso-layout-grid-align:none;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:\r\n.2pt\u0027\u003e(1) In Singapore personal tax is levied in a system which is not only\r\nprogressive but also is marginal at all levels. Singapore\u0027s tax brackets are\r\nshown in the table below. Tax is charged at a higher rate on only the\r\nadditional income earned, the entire income is not charged to a single tax\r\nrate. This, however, also means that the effective tax rate is actually quite\r\nlower than the highest tax rate applicable on the person\u0027s income.\u003cspan\r\nstyle=\u0027mso-tab-count:1\u0027\u003e  \u003c/span\u003e,\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003csup\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e_________________________________________\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/sup\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003csup\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/sup\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003csup\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e6\u003cspan\r\nstyle=\u0027mso-tab-count:1\u0027\u003e              \u003c/span\u003e\u003c/span\u003e\u003c/sup\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.2pt\u0027\u003eTax rates and policies have been obtained from\r\n\u0026quot;Worldwide tax guide 2011\u0026quot; published by PKF International\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003ctable class=MsoNormalTable border=1 cellspacing=0 cellpadding=0\r\n style=\u0027margin-left:32.65pt;border-collapse:collapse;border:none;mso-border-alt:\r\n solid windowtext .5pt;mso-padding-alt:0in 0in 0in 0in\u0027\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:0;mso-yfti-firstrow:yes\u0027\u003e\r\n  \u003ctd width=303 valign=top style=\u0027width:227.3pt;border-top:solid windowtext 1.0pt;\r\n  border-left:solid windowtext 1.0pt;border-bottom:none;border-right:none;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-left-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=54 valign=top style=\u0027width:40.8pt;border-top:solid windowtext 1.0pt;\r\n  border-left:none;border-bottom:none;border-right:solid windowtext 1.0pt;\r\n  mso-border-top-alt:solid windowtext .75pt;mso-border-right-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:1\u0027\u003e\r\n  \u003ctd width=303 valign=top style=\u0027width:227.3pt;border:none;border-left:solid windowtext 1.0pt;\r\n  mso-border-left-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.3pt\u0027\u003eTax \u003c/span\u003e\u003cspan\r\n  style=\u0027letter-spacing:.2pt\u0027\u003erate on` first 20,000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=54 valign=top style=\u0027width:40.8pt;border:none;border-right:solid windowtext 1.0pt;\r\n  mso-border-right-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.3pt\u0027\u003e0%\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:2\u0027\u003e\r\n  \u003ctd width=303 valign=top style=\u0027width:227.3pt;border:none;border-left:solid windowtext 1.0pt;\r\n  mso-border-left-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTax rate on next \u003c/span\u003e\u003cspan\r\n  style=\u0027letter-spacing:2.35pt\u0027\u003e10,000\u003c/span\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=54 valign=top style=\u0027width:40.8pt;border:none;border-right:solid windowtext 1.0pt;\r\n  mso-border-right-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e2%\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:3\u0027\u003e\r\n  \u003ctd width=303 valign=top style=\u0027width:227.3pt;border:none;border-left:solid windowtext 1.0pt;\r\n  mso-border-left-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.3pt\u0027\u003eTax \u003c/span\u003e\u003cspan\r\n  style=\u0027letter-spacing:.2pt\u0027\u003erate on next 10,000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=54 valign=top style=\u0027width:40.8pt;border:none;border-right:solid windowtext 1.0pt;\r\n  mso-border-right-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e4%\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:4\u0027\u003e\r\n  \u003ctd width=303 valign=top style=\u0027width:227.3pt;border:none;border-left:solid windowtext 1.0pt;\r\n  mso-border-left-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTax rate on next \u003c/span\u003e\u003cspan\r\n  style=\u0027letter-spacing:.3pt\u0027\u003e40,000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=54 valign=top style=\u0027width:40.8pt;border:none;border-right:solid windowtext 1.0pt;\r\n  mso-border-right-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e7%\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:5\u0027\u003e\r\n  \u003ctd width=303 valign=top style=\u0027width:227.3pt;border:none;border-left:solid windowtext 1.0pt;\r\n  mso-border-left-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTax rate on next \u003c/span\u003e\u003cspan\r\n  style=\u0027letter-spacing:.3pt\u0027\u003e40,000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=54 valign=top style=\u0027width:40.8pt;border:none;border-right:solid windowtext 1.0pt;\r\n  mso-border-right-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e12%\u003c/span\u003e\u003cspan\r\n  style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:6\u0027\u003e\r\n  \u003ctd width=303 valign=top style=\u0027width:227.3pt;border:none;border-left:solid windowtext 1.0pt;\r\n  mso-border-left-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTax rate on next \u003c/span\u003e\u003cspan\r\n  style=\u0027letter-spacing:.3pt\u0027\u003e40,000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=54 valign=top style=\u0027width:40.8pt;border:none;border-right:solid windowtext 1.0pt;\r\n  mso-border-right-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e15%\u003c/span\u003e\u003cspan\r\n  style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:7\u0027\u003e\r\n  \u003ctd width=303 valign=top style=\u0027width:227.3pt;border:none;border-left:solid windowtext 1.0pt;\r\n  mso-border-left-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTax rate on next\r\n  40,000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=54 valign=top style=\u0027width:40.8pt;border:none;border-right:solid windowtext 1.0pt;\r\n  mso-border-right-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e17%\u003c/span\u003e\u003cspan\r\n  style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:8\u0027\u003e\r\n  \u003ctd width=303 valign=top style=\u0027width:227.3pt;border:none;border-left:solid windowtext 1.0pt;\r\n  mso-border-left-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTax rate on next\r\n  120,000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=54 valign=top style=\u0027width:40.8pt;border:none;border-right:solid windowtext 1.0pt;\r\n  mso-border-right-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e18%\u003c/span\u003e\u003cspan\r\n  style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:9\u0027\u003e\r\n  \u003ctd width=303 valign=top style=\u0027width:227.3pt;border:none;border-left:solid windowtext 1.0pt;\r\n  mso-border-left-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTax rate above 320,000\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=54 valign=top style=\u0027width:40.8pt;border:none;border-right:solid windowtext 1.0pt;\r\n  mso-border-right-alt:solid windowtext .75pt;padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e20%\u003c/span\u003e\u003cspan\r\n  style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n \u003ctr style=\u0027mso-yfti-irow:10;mso-yfti-lastrow:yes\u0027\u003e\r\n  \u003ctd width=303 valign=top style=\u0027width:227.3pt;border-top:none;border-left:\r\n  solid windowtext 1.0pt;border-bottom:solid windowtext 1.0pt;border-right:\r\n  none;mso-border-left-alt:solid windowtext .75pt;mso-border-bottom-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n  \u003ctd width=54 valign=top style=\u0027width:40.8pt;border-top:none;border-left:none;\r\n  border-bottom:solid windowtext 1.0pt;border-right:solid windowtext 1.0pt;\r\n  mso-border-bottom-alt:solid windowtext .75pt;mso-border-right-alt:solid windowtext .75pt;\r\n  padding:0in 0in 0in 0in\u0027\u003e\r\n  \u003cp class=MsoNormal style=\u0027mso-pagination:none;mso-layout-grid-align:none;\r\n  text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n  \u003c/td\u003e\r\n \u003c/tr\u003e\r\n\u003c/table\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e(2) India\u0027s\r\npersonal tax rate is progressive and is also very simple. The tax rates are\r\ndivided into four brackets of 0%, 10%, 20% and 30%. There is no difference in\r\nrates for a salaried and non-salaried individual.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e(3) UK\u0027s personal\r\ntax rate is also divided into four brackets but the system is not as simple as\r\nthe Indian tax rates. UK\u0027s personal tax policy\u003csup\u003e\u0027\u003c/sup\u003e is progressive but\r\nit does not give marginal relief at all levels of income. All incomes above\r\n 2560 are applicable to a rate of 10%. If the income exceeds  35000 \u003c/span\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.1pt\u0027\u003eall \u003c/span\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003ethe\r\nincome is applicable to a rate of \u003c/span\u003e\u003cspan style=\u0027letter-spacing:.3pt\u0027\u003e40% \u003c/span\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.2pt\u0027\u003etax. However if the income also exceeds  150000 the\r\nadditional income above  150000 is charged to tax at 50%.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eIn a country with\r\nthe minimum wage at merely Rs.8000 a month there is a need for small startups\r\nto help eradicate poverty. However, when a major chunk of the profits are taken\r\naway in taxes efforts to increase living standards through entrepreneurship\r\nseem futile in nature. Also interesting is the fact that by taxing the salaried\r\nclass on considerably lower rates the government loses out on a major chunk of\r\nrevenue because of the lack of harmonization in the tax rates.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eINCOME FROM\r\nBUSINESS: THE CASE FOR ASSOCIATION OF PERSONS\u0027\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eDivision IB of the\r\nFirst Schedule specifies the rate of Tax for the Association \u003csup\u003e.\u003c/sup\u003eof\r\nPersons. At first there was no tax for income of an AOP for incomes less than\r\nRs.100,000. However, now there is an across\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e____________________________\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003csup\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e7\u003c/span\u003e\u003c/sup\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.2pt\u0027\u003eThe analysis was obtained from Huzaima Bukhari and\r\nDr. Ikramul Haq\u0027s article \u0026quot;Why penalize association of persons\u0026quot;\r\npublished in the \u003c/span\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eHuzaima and Ikram Tax\r\nJournal (January 8, 2012)\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003ethe board rate of\r\n25%. There is also a long list of items that are not admissible for the AOP\r\nunder section 21(j)_such as Salary for partner, commission and profit to\r\npartners. However, these or similar expenses are allowed for Companies. This\r\ndiscriminatory behavior is not fair for AOP coupled with the fact that a high\r\nrate of 25% means that an AOP \u003c/span\u003eis \u003cspan style=\u0027letter-spacing:.2pt\u0027\u003etaxed\r\nas a small company without enjoying the benefits that are so graciously\r\nbestowed on companies. This is obviously done by the FBR in order to boost\r\nrevenue collection, ignoring the bitter reality that the long term viable\r\nsolution lies not in getting more from those that are already paying but by\r\nwidening the tax base.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eINCOME FROM\r\nBUSINESS: CORPORATE TAXATION\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eCorporate taxation\r\nis another area of the Income Tax Ordinance that deserves its fair share of\r\ncriticism. Under Division II of Part I of the First Schedule the Income Tax\r\nOrdinance, 2001 imposes a flat 35% tax rate on the income of companies and 25%\r\ntax rate on the income of small companies.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eEvidence from\r\ncountries across the globe however is significantly different. In India\r\ncompanies are subject to a tax rate of 33.22% while small companies are subject\r\nto 30.9%. In UK companies are subject to a tax rate of 27% while small\r\ncompanies are subject to 20%. Marginal relief is given to companies where they\r\nfall into the category of a large company by a small amount. Malaysia imposes a\r\n26% tax rate on companies and a 20% tax rate on large companies. In a country\r\nthat most often fails to meet its fiscal and economic targets, a high tax rate\r\non companies is detrimental to growth. It limits the number of individuals\r\nwishing to set up companies.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eMINIMUM TAX ON\r\nCERTAIN PERSONS\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eSection 113 of the\r\nIncome Tax Ordinance imposes minimum tax on the income of certain persons. For\r\ncompanies a minimum tax of 1% of turnover is imposed. Although the minimum tax\r\ncan be carried forward and set off for five subsequent years, it may well be\r\npossible that some companies may end up paying tax even if they are making\r\nlosses. Since the minimum tax is a percentage of turnover it turns out to be a\r\nsignificant amount. Companies with low profits in consecutive years may end up\r\npaying an effective tax rate that is beyond the 35% imposed by the Income Tax\r\nOrdinance. Both the idea of minimum tax and its tax rates are problematic and\r\nare a burden on companies. The minimum tax also applies to companies operating\r\nin tax free zones or companies that have been granted tax holidays by the\r\ngovernment.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTAX ON DIVIDENDS\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eIt is important to\r\ndiscuss tax on dividends at this stage because of their association with\r\ncorporate taxation. The income from dividends is taxed as a separate bloc of\r\nincome at the rate specified in Division III of Part I of the First Schedule.\r\nCorporate dividends are therefore taxed at 10% under section 5. What is important\r\nto note here is that the dividends are essentially distributed from a company\u0027s\r\nprofit which has already been subjected to taxation. Taxing it again at a high\r\n10% essentially means that they are double taxed and that the effective tax\r\nrate on corporate profits in the hands of the shareholders is much higher than\r\nit seems.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTAX ON CAPITAL\r\nGAINS\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eSections 37 and 37A\r\nof the Income Tax Ordinance pertain to tax on capital gains. Section 37A\r\nspecifically applies to the tax on capital gains from the sale of securities.\r\nThe Income Tax Ordinance taxes capital gains on securities at a lower rate than\r\nit taxes other capital gains. It is interesting to note that capital gains\r\narising from securities held for more than one year are not chargeable to tax.\r\nEvidence from India indicates that both short term and long term gains are\r\ntaxed. Short term capital gains on securities in Pakistan are taxed on rates\r\nspecified under Division VII of Part I of the First Schedule. Also interesting\r\nis the fact that where India levies a generous 15% tax on short term capital\r\ngains, Pakistan fails to exploit this source of revenue by charging 10% and\r\neven lower in the case of securities held for more than six months but less\r\nthan a year. Countries like New Zealand and Malta include capital gains as\r\nordinary income and tax it accordingly.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003ePRESUMPTIVE TAX\r\nREGIME\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eSections 149 to 158\r\nare part of the presumptive tax regime. These sections primarily impose tax on\r\npresumed income. Analysis of the presumptive tax regime is complicated since it\r\nyields both positive and negative effects. It primarily seeks to bring tax\r\nevaders into the tax net, but in doing so it under exploits the tax potential\r\nand causes undesired effects on the economy.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTAX ON PROFIT ON\r\nDEBT\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eThe first in the\r\ncategory of the presumptive tax regime is the tax on profit from debt. Again it\r\nis important to note that it is -taxed as a separate bloc of income rather than\r\nbeing included in the calculation for taxable income and is taxed at 10% which\r\nis considerably lower than the tax rates applied to the non-salaried class in\r\nthe first schedule of the Income Tax Ordinance.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eAnother aspect of\r\nthe presumptive tax on the profit on debt is that it charges tax to even those\r\nwho fall below the taxable limit. A widow earning a nominal amount that falls\r\nbelow the taxable limit is \u003c/span\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eforced to\r\npay the tax on profit on debt which cannot be adjusted or more specifically\r\nrefunded. Thus, there is an effective tax rate that the widow ends up paying\r\neven though she falls below the taxable limits.\u003c/span\u003e\u003cspan style=\u0027letter-spacing:\r\n.2pt\u0027\u003e\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eOTHER\r\nPRESUMPTIVE TAXES\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eVarious other\r\nprovisions of the presumptive tax regime are to a great extent discriminatory\r\nand are under exploitative of the fiscal policy. The following are listed with\r\nreference to sections:--\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify;mso-pagination:\r\nnone;mso-layout-grid-align:none;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:\r\n.1pt\u0027\u003eThe tax on importers is 5% of the value of goods. It is interesting to\r\nnote that the tax is final and the importer is not required to pay further tax\r\non the income generated from selling those goods. Much of this tax is passed\r\nonto consumers in the form of higher prices\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify;mso-pagination:\r\nnone;mso-layout-grid-align:none;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:\r\n.1pt\u0027\u003eThe tax on contractors is 6% of the gross amount payable. The tax is full\r\nand final and no further tax has to be paid by the contractors.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eAlthough these\r\ntaxes are imposed on gross amounts and are substantially high, it is important\r\nto note that such taxes may be passed on to consumers by incorporating them in\r\nthe price. Such incorporation leads to inflation.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eTAX CREDITS\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eThe Income Tax\r\nOrdinance, 2001 allows generous tax credits under sections 61, 62 and 63. It is\r\nimportant to note that the formula devised in each of the three sections\r\nessentially churns out the tax rate charged to the taxable income computed\r\nbefore allowing for tax credits. It here becomes imperative that the higher the\r\ntax bracket that a person lands into, the higher the tax credit that he receives.\r\nThis essentially leads to a regressive effect based on provisions of section 61\r\nto section 64. The problem lies here in the fact that the tax credit is\r\ndetermined by the tax rate. The higher the tax bracket the higher the tax\r\ncredit is likely to be although the amount of donation may largely remain the\r\nsame.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eRECOMMENDATIONS\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.1pt\u0027\u003eWith reference to\r\nthe Income Tax Ordinance there is a need for harmonization of tax rates across\r\nthe different heads of income and different individuals. Although the tax\r\nsystems should be progressive they should not cause injustice to any individual\r\nwhere the level of income remains the same. There is also a need to tap the\r\nuntapped areas of income such as gain from sale of property and agricultural\r\nincome. Following is a set \u003c/span\u003eof \u003cspan style=\u0027letter-spacing:.1pt\u0027\u003erecommendations\r\nwith comparison across countries and the benefits that may be yielded by taxing\r\nagriculture and property.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTAXING GAINS ON\r\nSALE OF PROPERTY\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eThe Constitution\r\nexcludes legislation on taxation of capital gains on immovable property from\r\nthe purview of the federal government. The income tax law has also been aligned\r\nwith these constitutional provisions by excluding the immovable property from\r\nthe definition of a capital asset under section 37.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eDespite this\r\nexclusion, profits on some transactions concerning immovable property are\r\ntaxable under the Income Tax Ordinance for example disposal of property\r\nacquired as a stock \u003c/span\u003ein \u003cspan style=\u0027letter-spacing:.2pt\u0027\u003etrade or with\r\ncommercial intent to make profit. However, gains realized on disposal of\r\nimmovable property transferred as a consequence of family inheritance, gifts or\r\nwithout commercial motives, or the property held as a business capital asset\r\nare still exempt.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eCAPITAL GAINS\r\nTAX ON PROPERTY: EVIDENCE FROM OTHER COUNTRIES\u003csup\u003e8\u003c/sup\u003e\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eIn India, when a\r\nproperty is sold, depending on the holding period, one will either earn a short\r\nterm or a long term capitals gain. If the holding period is more than three\r\nyears, the capital gains will be long-term; otherwise it will be a short-term\r\ncapitals gain. In Philippines, An individual is subject to capital gains tax on\r\nthe sale of real property at a rate of 6% of the gross sales price or current\r\nfair market value, whichever is higher. In Malaysia, capital Gains on the\r\ndisposal of property are taxed at the rate of 5%.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eHence as we can\r\nsee, Pakistan is losing out on a big source of tax revenue that other\r\ndeveloping countries are making the most use of. Property tax on capital gains\r\nis a valuable resource especially because it is a direct form of taxation and\r\nits imposition will not only allow the government to collect large amounts of\r\nrevenue but this will also serve as a source of wealth redistribution and\r\npoverty alleviation in the country.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eAGRICULTURE TAX\u003csup\u003e9\u003c/sup\u003e\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eThe tax on income\r\nfrom agriculture should be made a federal subject in order to improve both the\r\neffectiveness and efficiency of tax\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e______________________\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003csup\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/sup\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003csup\u003e8\u003c/sup\u003e \u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eThe\r\nanalysis of tax in India was obtained from Sandeep Shanbag\u0027s article\r\n\u0026quot;Capital gains tax on property decoded\u0026quot; published in \u003c/span\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.3pt\u0027\u003eDaily News and Analysis \u003c/span\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.2pt\u0027\u003eon 15 September 2011.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003csup\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e9\u003cspan\r\nstyle=\u0027mso-tab-count:1\u0027\u003e              \u003c/span\u003e\u003c/span\u003e\u003c/sup\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.2pt\u0027\u003eThe analysis on agriculture tax was obtained from\r\n\u0026quot;Taxing the Agriculture Income in Pakistan\u0026quot;, briefing paper by\r\nPILDAT.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003ecollection. Tax\r\nfrom agriculture has a huge potential for revenue generation, based \u003c/span\u003eon \u003cspan\r\nstyle=\u0027letter-spacing:.2pt\u0027\u003ethe following table:--\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eTABLE 4: Sources\r\nof Growth and Tax (for 2009-2010) \u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eContribution to\r\n(in %) \u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify;text-indent:.5in;\r\nmso-pagination:none;mso-layout-grid-align:none;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan\r\nstyle=\u0027letter-spacing:.2pt\u0027\u003eGDP\u003cspan style=\u0027mso-tab-count:2\u0027\u003e                \u003c/span\u003eGrowth\r\n\u003cspan style=\u0027mso-tab-count:2\u0027\u003e                       \u003c/span\u003eTaxes\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eAgriculture\u003cspan\r\nstyle=\u0027mso-tab-count:1\u0027\u003e        \u003c/span\u003e22\u003cspan style=\u0027mso-tab-count:2\u0027\u003e                    \u003c/span\u003e10\u003cspan\r\nstyle=\u0027mso-tab-count:3\u0027\u003e                                \u003c/span\u003e1\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eIndustry\u003cspan\r\nstyle=\u0027mso-tab-count:1\u0027\u003e            \u003c/span\u003e25\u003cspan style=\u0027mso-tab-count:2\u0027\u003e                    \u003c/span\u003e30\u003cspan\r\nstyle=\u0027mso-tab-count:3\u0027\u003e                                \u003c/span\u003e63\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eServices\u003cspan\r\nstyle=\u0027mso-tab-count:1\u0027\u003e           \u003c/span\u003e53\u003cspan style=\u0027mso-tab-count:2\u0027\u003e                    \u003c/span\u003e60\u003cspan\r\nstyle=\u0027mso-tab-count:3\u0027\u003e                                \u003c/span\u003e26\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003eSource: Federal Bureau of Statistics, Federal Board\r\nof Revenue\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eHowever, the\r\ndecision to increase tax rates and to make it a federal subject has both its\r\npros and cons.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eArguments for the\r\ntax are as follows:--\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify;mso-pagination:\r\nnone;mso-layout-grid-align:none;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:\r\n.2pt\u0027\u003e(1) The present fragile economic situation requires the government to\r\nraise more revenue in order to lift the low tax-to-GDP ratio and in order to\r\nmeet revenue and fiscal targets, which it has missed for the past four (4)\r\nyears. An oft-quoted estimate of the revenue potential of the agricultural\r\nsector is Rs.250-300 billion, which is calculated on the basis of the\r\nagriculture sector\u0027s contribution to the GDP and the income tax rates that are\r\ncurrently applied to non-agricultural sectors.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify;mso-pagination:\r\nnone;mso-layout-grid-align:none;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:\r\n.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify;mso-pagination:\r\nnone;mso-layout-grid-align:none;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:\r\n.2pt\u0027\u003e(2) Agricultural income tax can be made progressive, i.e., those who earn\r\nmore, \u003c/span\u003epay \u003cspan style=\u0027letter-spacing:.2pt\u0027\u003emore. This is tied to the\r\nfact that many rich and influential landlords do no significantly contribute to\r\ntax revenues, and so\u003csup\u003e\u0027\u003c/sup\u003e their incomes may be targeted through a\r\nprogressive tax rate that is comparable to income tax rates for financially\r\nsimilar individuals earning from non-agricultural sectors of the economy.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify;mso-pagination:\r\nnone;mso-layout-grid-align:none;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:\r\n.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027margin-left:.5in;text-align:justify;mso-pagination:\r\nnone;mso-layout-grid-align:none;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:\r\n.2pt\u0027\u003e(3) Discrimination against the agriculture sector through the imposition\r\nof low prices has diminished in the past decade due to the implementation of\r\nstructural adjustment programme and the sector now has an untaxed potential\r\nbecause of the decline in implicit taxation.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eLooking at the\r\nsuccess story of Uruguay as it moved through a land based to an output based\r\ntax:\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eOne relatively\r\nsuccessful story is that of Uruguay, which adopted a gradual transition from\r\nland-based taxes to a form of agricultural (presumed) income tax. One lesson\r\nthat is particularly applicable to Pakistan is that this transition began by\r\ntargeting large/more commercial farmers and then moved to a wider presumptive\r\nincome tax. The agricultural tax reforms in Pakistan must be paced\r\nappropriately so that the benefits of a more gradual process of reformation may\r\nbe availed.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eFollowing are the\r\nrecommendations for bringing the agriculture sector into the tax net:-\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e(1) The tax rate\r\nper acre is very low (Rs.150-250 per acre). This amounts to only around 1 % of\r\nthe estimated net income per irrigated acre of Rs.25,000-30,000. The BNU\r\nInstitute of Public Policy.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e(IPP) recommends\r\nthat these rates should be enhanced to Rs.750 per acre (for up to 25 acres) and\r\nRs.1,250 per acre (beyond 25 acres) with a minimum exemption limit of 12.5\r\nacres.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e(2) The penalties\r\non non-compliance with taxation procedures are extremely low. For example, the\r\npenalty for failure to file a return is a maximum of Rs.1,000. The IPP\r\nrecommends that this should be raised to Rs.10,000 in order to enforce\r\ncompliance. It is expected that if a penalty is lower than the tax amount being\r\nevaded, this creates an incentive to pay the penalty instead of the tax.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e(3) 50% of the tax\r\ncollected from any individual should go directly to the Zila Council of the\r\nindividual\u0027s district. Such a policy may have the effect of improving tax payer\r\ncompliance.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e(4) The IPP\r\nestimates that if changes A and C are incorporated into current legislation,\r\nand collection efficiency is improved, the taxation potential of the sector\r\ncould rise to Rs.10-15 billion.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cb\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eCONCLUSION\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/b\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003e\u003co:p\u003e\u0026nbsp;\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003cp class=MsoNormal style=\u0027text-align:justify;mso-pagination:none;mso-layout-grid-align:\r\nnone;text-autospace:none\u0027\u003e\u003cspan style=\u0027letter-spacing:.2pt\u0027\u003eThe dilemma of the\r\nIncome Tax Ordinance is huge. Pakistan continues to suffer under the weight of\r\ncorruption, tax evasion and inappropriate economic policies. The need for the\r\nmoment is first to realize that each individual is responsible for the country\r\nand sabotaging the interests of the country and those of its citizens for\r\npersonal gain will not bring any benefit. Although unjust and harsh it is still\r\nthe responsibility of all individuals to pay the due to taxes to allow the\r\ncountry to operate without dependence on foreign aid. In doing so over the\r\nyears we may be able to bring to governance, people who devise just and\r\nappropriate policies for the benefit of this country.\u003co:p\u003e\u003c/o:p\u003e\u003c/span\u003e\u003c/p\u003e\r\n\r\n\u003c/div\u003e\r\n\r\n\r\n  \r\n\u003c/head\u003e\r\n \r\n\r\n\u003c/html\u003e\r\n"