KARACHI: The evasion of taxation is almost as old as its levy. In sub-continent, the age-old simple method is to prepare two sets of accounting books: One for the owner/proprietor’s own consumption and the other (often in less familiar vernacular) for the tax man. Of course, the figures of the two do not tally. Which one would show the actual higher income is easy to comprehend.

Keeping aside the sole proprietor and partnership businesses, the corporate sector (both listed and unlisted) complains of high taxation. That for them is the bane of business.

Import duty, sales tax, rising utility and material costs, appropriations under the labour laws and finally the income tax at 35 per cent, leave little incentives for industries to grapple with the innumerable problems in production, marketing and sale of products. An industrialist claimed that he had to pay out as many as 26 different taxes, levies and duties. And that does not include the outstretched palms of various tax collectors, which must continuously be greased.

Until June 2002, there was a difference of 10 per cent in rate of income tax paid by the listed and unlisted companies with the latter having to pay at 45 per cent against 35 per cent for listed companies. That difference has gradually been eroded and now both are taxed at the same rate of 35 per cent. If the stock market players are to be believed, that is one of the reason that only 660 of the 30,000 registered companies have sought listing at the stock exchanges.

Industries (both listed and unlisted) are also under tremendous burden of dumping; high production costs; labour issues and an inconsistent government policies. Small wonder that many industrialists have turned to trading or even in speculative activities in stocks, commodities and real estate.

Exemption of much dreaded capital gain tax is available until financial year ending June 2007 and an extension is being sought for another five years.