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CONCEPT OF TAX
Presented by:
Ali A. RahimDirector
4thFloor, Central Hotel Building
Civil Lines, Mereweather Road
Karachi - Pakistan
Phone: 021
35644872-7Fax: 02135694573
E-mail: [email protected]
Contact Address:
Karachi Tax Bar
Association
May 20, 2011
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WHY TAXATION :-
Every country needs funds
For Running the Government & Establishment
For Defence
For Future Developments Programmes
CONCEPT OF TAX (General )
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TYPES OF TAXATION
CONCEPT OF TAX (General )
* In certain countries these taxes are imposed on the Provincial
/ State
Level.
PROVINCIAL TAXPROPERTY TAXPROVINCIAL EXCISEWATER TAXCUSTOM
DUTYUSHER/DHAL/ABIYANA& A HOST OFOTHER TAXES
FEDERAL TAXINCOME TAXSALES TAX / VAT*FEDERAL EXCISE*CUSTOM
DUTY*WEALTH TAXZAKAT
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CHINA HAN. DYNESTY (Ancient) 10 BC
CONCEPT OF TAX
INCOME TAX (History )
First known history of imposition of Income tax on earnings 10%
which
was applicable on professionals and salary.
Previously tax used to be levied only on properties (land
holdings) andcollected by the respective states of which a
percentage was passed on tothe center.
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CONCEPT OF TAX
INCOME TAX (History )
UNITEDKINGDOM
In the modern time Income tax was imposed for the first time on
income in
1798 to pay for the weapons and equipments to prepare for the
Napoleonwar.
This was the first time that the tax went higher with the income
going up.
This tax was abolished in 1816.
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CONCEPT OF TAX
INCOME TAX (History )
UNITEDSTATES
In 1861 (Revenue Act 1861) Income tax was imposed on the income
of
citizens for the first time by the U.S government to fund the
Civil War inU.S.A.
This continued till 1894 when 2% Income tax was imposed on
income overUS$ 4,000/- per annum.
This brought into the taxation only about 10% of the house hold
of U.S.A
This was more like a fixedtax.
In 1895, progressive Income tax was imposed for the first
time.
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CONCEPT OF TAX
INDIRECT TAX (History )
ROMANEMPIRE
History reveals that a tax was imposed for the first time on all
imports and
exports called portoxia. This is the first time that the history
of CustomDuty as we now know it, was introduced.
It was collected on sea and land routes.
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ROMANEMPIRE
Julius Caesar was the first person to impose what is today known
as
Sales-tax at 1% of all sales. It was further increased to 4% on
sale ofslaves only.
History elaborates that a revolt started in 60 AD in East Anglia
British Islesagainst in the corrupt tax collectors, and this is the
first known corruption inrecorded tax history.
CONCEPT OF TAX
INDIRECT TAX (History )
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CONCEPT OF TAX
INDIRECT TAX (History )
ROMANEMPIRE
Caesar Augustus was the first person to impose the
Inheritancetaxat 5%
on all assets, except gifts to children and spouses.
This was the start of the Inheritance tax, followed by the West
and was alsoknown as EstateDutyin certain Countries.
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ISLAMICCONCEPT
Islam imposes the followings taxes:-
(i) Zakat (on propert ies)
(i) Ushr (on agr icultural land)
(i) Jaiza (paid the (Islam ic) victor s of the war)
CONCEPT OF TAX
INDIRECT TAX (History )
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CONCEPT OF TAX
EVOLUTION OF INCOME TAX (History )
In 1869 this act was converted into the Income Tax Act 1869 and
one to theimportant features was that agricultural income was
brought into thetaxablenet.
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CONCEPT OF TAX
EVOLUTION OF INCOME TAX (History )
Pakistan adopted the Income tax Act 1922 when it became
Independent in1947 and this act was followed upto 1979 when a new
Income TaxOrdinance 1979 was promulgated.
The concept of the Income Tax Ordinance was very much the same
as theAct of 1922 but was brought into a serial order till a new
Law called theIncome Tax Ordinance 2001 was enacted which came into
force from 2003.
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TYPES OF TAXATION
IN PAKISTAN
PROGRESSIVE TAX PROPORIONATE TAXREGRESSIVE TAX
CONCEPT OF TAX
EVOLUTION OF INCOME TAX (History )
SALES TAX
EXCISE TAX
CUSTOM DUTY
SHARE OF TAXINCOME TAX
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CONCEPT OF TAX
EVOLUTION OF INCOME TAX (History )
CONCEPTUAL
i) Assessee VsTax Payers
ii) Assessment VsAuditiii) Self Assessment VsUniversal Self
Assessmentiv) Assessment Year VsTax Year
DIFFERENCE BETWEEN OLD ORIDNANCE & ORDINANCE 2001
i) Income - Taxii) Sales - Taxiii) Federal Excise Dutyiv) Custom
Duty
LAW SPREAD OVER
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CONCEPT OF TAX
EVOLUTION OF INCOME TAX (History )
CENTRAL CONCEPTS
Persons Section 80
Residential Status Section 81
Resident Individuals Section 82
Resident Company Section 83
Resident Association of Persons Section 84
Associates Section 85
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