Page 10 - CMA Journal (Mar-Apr 2025)

Exclusive Interview

1) There is an urgent need to reduce the tax burden on
the public. The current overwhelming number of
taxes and their high rates are fostering tendencies of Under the 26th Constitutional
tax evasion among the public. The practice of
bribery in tax collection is also rampant. It is critically Amendment, the complete
important for the government to reduce its
expenses as much as possible, eliminate all eradication of interest from
unnecessary expenditures, and, in proportion,
lessen the tax burden on the public. Pakistan’s economy is to be
2) To meet necessary expenditures, the government
should rely on only a few taxes, and these taxes achieved by January 2028. This
should align with the principles of Shariah as constitutional mandate requires
outlined in the previous sections.
3) The current indirect taxes, such as sales tax and urgent and serious action
excise duties, are unjust because their burden falls
more heavily on the poor than on the rich. Our
ultimate goal should be to have a tax system that
consists solely of direct taxes. However, for an 8) Tax laws and regulations should be in Urdu or the
interim period, some indirect taxes can be tolerated, local language, and the staff should have minimal
provided it is ensured that no other type of tax will discretionary powers.
be levied on items of daily use by the poor. The
government should develop a five-year plan in 9) Implementing the proposals mentioned in these
which the reliance on indirect taxes is gradually reports could put an end to the existing unjust
reduced each year. By the end of this period, only taxation system.
those indirect taxes should remain which either fall ICMA: What key Islamic Economic reforms is the CII
under the definition of Ushr (customs duties) that
currently recommending to the Parliament?
were prevalent in the early Islamic period or are
levied on goods whose consumption is discouraged Chairman CII: At present, the foremost demand of the
for national interests. Council of Islamic Ideology is the implementation of the
Federal Shariat Court’s decision concerning Islamic
4) The direct taxes, particularly income tax, should be
economic reforms. Full enforcement of this decision is
completely abolished. The existing wealth tax
should be expanded, and its rate should be expected to align Pakistan’s economic system with the
increased to a reasonable level. The definition of principles of Islam. Following the Court’s verdict, the
wealth should include both movable and Council has written to relevant authorities and
immovable assets. The total value of these assets, institutions, urging them to fulfill their responsibilities in
with the exception of a reasonable threshold, should this regard.
be subject to taxation.
To facilitate implementation, the Council has also
5) The methods for determining and collecting both recommended the establishment of various committees
direct and indirect taxes should be simplified as and task forces to take practical steps toward the
much as possible, and the discretionary powers of elimination of interest. Furthermore, under the 26th
the administration should be minimized. The wealth Constitutional Amendment, the complete eradication of
tax should be implemented on a self-assessment interest from Pakistan’s economy is to be achieved by
basis, but the law should allow for the random January 2028. This constitutional mandate requires
selection of 5% of the tax returns via computer for
urgent and serious action.
detailed scrutiny. If a return is found to be
fraudulent, severe penalties should be imposed, The State Bank of Pakistan should initiate immediate
including the confiscation of all wealth. efforts to ensure this target is met within the stipulated
timeframe. Implementation of this decision is not only a
6) The system of Zakat and Ushr should be fully
constitutional obligation but also a long-standing
implemented. No Muslim, whether Shia or Sunni,
should be discriminated against, and the aspiration of the Muslim population of Pakistan and a
recommendations that the Council has periodically foundational principle upon which the country was
made to the government in this regard should be established.
fully implemented.
The Editorial Board thanks Allama Muhammad Raghib Hussain
7) Tax laws should not be exempt from judicial review, Naeemi, Chairman, Council of Islamic Ideology (CII) for sparing
and the right to appeal against tax assessments from his precious time to give exclusive interview for Chartered
should be granted in court. Management Accountant Journal.
8 ICMA’s Chartered Management Accountant, Mar-Apr 2025