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" A CRITICAL ANALYSIS OF INCOME TAX ORDINANCE, 2001   A CRITICAL ANALYSIS OF INCOME TAX ORDINANCE, 2001   By   M. Anum Saleem1 and Ussama Ahmad Khan2   INTRODUCTION   Tax legislation is of concern to governments across the globe because of its effects on economic activity in addition to its fiscal importance. This paper seeks to highlight how the tax rates contained in _________________________   1 M. A. ECONOMICS (PUNJAB), LLM (TORONTO), ADVOCATE HIGH COURT, ADJUNCT FACULTY, LUMS, PARTNER, SALEEM AND SHIRAZ, ADVOCATES AND LEGAL COUNSELS   2 BSC Final year student at LUMS   the Income Tax Ordinance, 2001 cause injustice to tax payers, are fiscally inappropriate and affect economic activity negatively. In the course of the paper, comparisons to various countries, their tax policies and tax rates are made.   CURRENT STATE OF THE ECONOMY   Pakistan, through 65 years of its existence has suffered on the economic front due to several reasons. Among the most important are the political situation, massive corruption and inappropriate economic policies. Governments throughout these years have failed on most accounts to achieve a budget surplus. This is despite of the fact that Pakistan has been endowed with numerous natural resources and is strategically located. Yet the inclination of the government to exploit the resources for the country's benefit has been primarily missing. Corruption at all levels of hierarchy in government departments across the. country has been a major player in sinking the ship that could have been a world leader. Undue emphasis on politics has caused the economy to suffer further   Pakistan currently faces a budget deficit of Rs. 1.4 trillion for the fiscal year 2011-2012. Nine months through the…