Reviving the inheritance tax

Afshan Subohi, a Dawn author, argues that burdening ordinary citizens with additional levies is inhumane when the government fails to provide basic amenities and security. She calls for a revisit of the regressive tax framework in Pakistan and suggests tapping into the piles of unearned wealth accumulated by the elite class. Recently, an amendment in the Finance Act 2022 ruled to tax capital gains on the sale and purchase of property, including gifted and inherited estate, which experts believe has revived inheritance tax. However, some are against the move, considering it an additional burden on people and companies already in the tax net, and believe the government should broaden the tax net instead. Pakistan had an inheritance tax called Estate Duty Act 1950 for 29 years until it was abolished by General Zia ul Haq. Afshan Subohi highlights that M Abdul Aleem, Secretary General of the Overseas Chamber of Commerce and Industry, recognized the utility of inheritance tax in developed countries but believes that Pakistan, with over 40 taxes, including provincial and local ones, is not yet ready for it. However, Saroop Ijaz, a prominent lawyer associated with the Human Right Watch, rooted for inheritance tax and dismissed grounds for its opposition, stating that it was part of a larger attempt to take an about-turn in the nation’s march towards progressive taxation.

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