ZAKAT is an important pillar of Islam. It ensures economic balance in a society by circulating wealth from the rich to the poor. The amount of money charged as zakat is only 2.5 per cent, which is an indication of the fairness inherent in the system.
The Federal Board of Revenue (FBR) has been trying to bring more people into the tax net by using various methods to enhance the tax base. However, despite all kinds of efforts, it has failed to achieve the objective. Perhaps, the FBR can learn a lesson or two from the fair model of zakat.
The FBR needs to reduce the tax rate to enhance the tax base. Moreover, it should use modern methods and digital tools to trace and locate the people who are supposed to pay taxes.
Lowering the tax rates will not only bring in the much-needed element of fairness in the tax system, but will also encourage people to get themselves registered with the FBR and disclose their true income.
Currently, the lowest income tax slab is 5pc, which is twice as much as that of zakat. Besides, the liability increases with the rising income. Hence, it is important to reduce the taxrateinstead ofincreasingit and putting the taxpayers under unbearable burden.
