THIS refers to Aman Ullah Turk's letter 'Wealth tax instead of RGST' (Nov 13). He has proposed the revival of wealth tax instead of the RGST, which, according to him, used to provide more than Rs15 billion to the exchequer. It is not correct. Receipts from this tax never exceeded one per cent of the federal revenue which at the time of wealth tax abolition in 2002 was Rs464 billion.

The wealth tax adversely affected the middle classes as the prescribed exemption limit of one million rupees was too low. Even a small 120 square yard house in an urban area costs much more.

Even under this tax, a self-occupied house was not spared. That too was brought within the tax net.

It is relevant to point out that most countries have done away with this tax as it is considered to be retrogressive and discourages capital formation.

In fact, it amounts to a tax on savings.

R.R. ALVI

Lahore