Press Release
Hizb ut Tahrir / Wilayah Pakistan Issues Policy Paper on Destructive Taxation and Spending Policies Only the Khilafah Will Not Tax the Poor

Hizb ut Tahrir / Wilayah Pakistan has issued the following Publicized Policy Position (PPP) which clearly demonstrates how Pakistan's revenue and expenditure policies can lead to economic strength and prosperity by adopting Hizb ut Tahrir's constitution for the Khilafah "Caliphate".

Economic strength is not possible either through Democracy or Dictatorship. Both forms of ruling are corrupt as they allow revenues and spending to favor the Kafir colonial powers and their agents who come to rule within Pakistan. Dictatorship and democracy deprives the state and the general public huge sources of revenue, through privatization of the public properties, such as oil, gas and electricity.

Under World Bank and IMF supervision, Pakistan has been strangled by huge taxation on earnings and consumption of goods that are constantly being increased as a proportion of the total revenue. In 2011-12, the government extracted Rs. 730,000 million in income taxes alone, which is more than the entire revenue collected in 2002-3.This has meant that the labour force, blue and white collar workers are facing ever greater hardships, with increased taxation eating away at their wages. Moreover, in the 2012-13 budgets, the government is now chasing a target of a staggering Rs. 914,000 million. Consider also sales tax that has swollen from 9% to 43% of the state's major taxes. It is this sales tax that has made buying medicine, food, inputs for agriculture and industry unbearable for people, choking their ability to contribute to the economy and secure basic needs. In 2011-12, the government extracted Rs. 852,030 million in general sales taxes and in the 2012-13 budget, the target is Rs. 1,076,500 million.

As long as this corrupt system remains the situation will worsen, no matter who comes to power. This corrupt system can only produce such failure as it is designed to neglect the affairs of the people and this is why all those who seek power in this system are also calling for increased taxation.

Unlike Capitalism; Islam does not rely on taxation on income and consumption as virtually the sole means to generate revenue. Its revenue generation is based on accrued wealth beyond the basic needs or upon actual production. Even when the Khilafah "Caliphate" does tax, it is with stringent conditions that are based upon accumulated wealth, so it does not penalize poor and under-privileged who are unable to secure their basic needs. And this is asides from the huge revenue that the state will generate from state owned and publicly owned enterprises such as energy resources, machinery and infrastructure manufacture. Industry will thrive in the Khilafah "Caliphate". It will not be strangled by taxes for all manner of crucial inputs, from energy to machinery. Instead, the state will generate revenue from profits of the trade and accrued trading merchandise. This allows the businesses to focus on production without fetters, whilst circulation is ensured through their giving of revenues from their profits or accrued wealth. In Islam, the taxation is not based on consumption of agricultural inputs, but on production from the land, which enables the farmer to maximize the production, without being slowed down by over-expensive inputs.

Note: To see complete policy and its relevant articles of the constitution for the Khilafah "Caliphate" state please go to this web link.
http://htmediapak.page.tl/policy-matters.htm

The Media Office of Hizb ut Tahrir in Wilayah of Pakistan