Re: NS and IK income and Taxes
The more money Imran makes, the fewer taxes he pays - thenews.com.pk
ISLAMABAD: The more money he makes, the less tax he pays and meanwhile keeps the cash away from bank. This is not a story of a typical rich Pakistani but of Tehreek-e-Insaf (PTI) Chairman Imran Khan.
If the last four years are any guide, the PTI chief paid the highest tax in 2010 on an income that was the lowest when compared to the following three years. While he registered a handsome increase in earnings from 2011-13, it was accompanied with an 80 percent decrease in tax as the business income used to be declared earlier was largely replaced with agriculture and services (outside Pakistan) income.
Another major shift has been noted in terms of his changing priorities with regard to the parking of cash. In the beginning, he would keep it at bank and gradually started keeping it away from the bank.
Imran had the maximum cash (Rs6.2 million) in bank account by 2010 when he paid the highest amount of tax i.e. Rs1.8 million over an income of Rs10.6 million. This contrasted with the minimum bank balance of Rs362,069 in 2011 when he registered the earning of Rs23.50 million, the highest in four years. It accompanied by a drastic cut in his tax as he paid Rs322,110 that year.
In yet another instance, a major difference in tax amount was noted despite the fact that there was a minor variation in the annual income of two separate years. Apparently, there is 17.34 percent difference in the income that Imran reported in 2010 and 2013 but intriguingly a variation of 83.50 percent in the tax amount has been recorded in the corresponding years.
Imran paid Rs1.85 million tax over the declared income of Rs10.63 million in 2010 whereas his tax drastically reduced (Rs194,936) over relatively bigger income (Rs12.32 million) in 2013, according to a detailed analysis carried out by Agha Samiullah, a tax consultant.
How did this major cut in his tax amount occur? Imran had declared a sum of Rs8.2 million as income generated through business in 2010 financial year that caused him heavy taxation. The following year, business income was reduced to Rs546,620 whereas agriculture income and foreign remittances registered an increase. Business income’ has disappeared as there is no mention of it in tax returns of 2012 and 2013.
Imran paid the highest tax in 2010 of Rs1.85 million over an income of Rs10.63 million generated through business, profit on debt, agriculture, services (outside Pakistan) and property rent. By the close of that financial year, he had almost equal amount of cash in hand (Rs6.8 million) and at bank (Rs6.2 million).
The year 2011 noticed the highest earning with Rs23.5 million that was 54 percent more than the previous year. However, tax deduction was 83 percent less than 2010 as he paid only Rs322,110. The types of earnings mentioned noticed a negligible amount of business income (Rs546,620) and a major increase in agriculture income (from Rs750,000 in 2010 to Rs2.3 million in 2011). Foreign remittances (charges of the services he offers outside Pakistan) jumped from Rs1.1 million in 2010 to Rs19.7 million in 2011. Property rent was also doubled during that financial year. This huge outflow of income notwithstanding, money in bank at the close of financial year was Rs576,000 that contrasted with Rs1.1 million cash in hand.
In 2012, Imran declared income was Rs16.1 million and tax paid on it was Rs273,339. Significant change during this year was the absence of any business income. Profit on debt, agriculture, services (outside Pakistan) and property rent was declared as source of income. Another noticeable development was an increase of cash in hand that was Rs12.1 million whereas cash at bank was Rs2.1million.
He declared Rs12.3 million income in 2013 and paid only Rs194,936 tax over it. Most of the income declared was from agriculture and services (outside Pakistan). This year saw the declaration of the highest amount of cash in hand (Rs13.61 million) whereas Rs381,765 was in bank at the closing of that financial year.