Higher income groups may be taxed to fund Zarb-e-Azb

ISLAMABAD: The government is considering a proposal to impose 10 to 15 percent surcharge on higher income contributors who earn more than Rs50 million in order to support the ongoing military operation Zarb-e-Azb against terrorism.
“The government is seriously considering imposition of surcharge on higher income earners in the coming Finance Bill, 2015 which will be tabled before the National Assembly on June 5, 2015,” official sources in the FBR confirmed to The News here on Monday.
Finance minister has tasked FBR’s top guns to come up with exact estimates of revenue generation with the imposition of additional surcharge on higher income groups. The initial estimates of FBR suggest that the tax machinery can collect Rs10-20 billion depending on effective enforcement.
The Tax Reform Commission (TRC) had also recommended to the government to impose this kind of surcharge on higher income earners for a period of three years.Under the proposed amendment, section 4A of the Income Tax Ordinance 2001 is to be re-inserted in the following manner; 1. Subject to this Ordinance, a surcharge shall be payable by every taxpayer at the rates specified under First Schedule Part I, Division I and II on the income tax payable under the Ordinance.
2. Surcharge shall be paid and deposited at the same time and in the same manner as the tax is paid and deposited under this Ordinance. Provided that this surcharge shall not be payable for the tax year 2015 and prior tax years and shall be applicable, subject to the provision (1) for the tax year 2016 and till tax year 2018.