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IMPACT OF HEAVY TAXATION ON EDIBLES

SUBMITTED BY:

Syed Hussain Ahmed

A Report Submitted For Writing Research Report

SUBMITTED TO:

Dr. Zaira Wahab

IQRA UNIVERSITY, KARACHI

SUBMITTED ON DATE: 15th of December, 2010

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2012-02-22 Heavy Taxation On Edibles Pg # 1

ACKNOWLEDGEMENT

I the student of the IQRA UNIVERSITY, extend my greatest thanks for Almighty ALLAH Who is the

source of all knowledge and wisdom endowed to mankind and to the humanity as a whole. I would

particularly like to thank Dr. Zaira Wahab for many insights she provided me throughout this Time

writing research report. Discussions with her have also proven most helpful.

The encouragement and assistance of my parents and friends are gratefully acknowledged. Most of all,

I wish to thank who provided us the important and relevant information to complete this report.

This report would never have been possible without the contribution of the participants who took time off to

complete our questionnaires.

All the friends and supporters who helped are acknowledged for putting in their effort, hard work &

willingness in this reports fulfillment.

It is beyond doubt that I really owe this to my teacher. I have endeavored to come to your expectations which

surely will go rewarded.

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LETTER OF TRANSMITTAL

December, 2010

DR: Zaira Wahab

Instructor: Writing Research Report

Dear Miss. Zaira Wahab

Here is the report on heavy taxation on edibles submitted, which I am required to submit as per our courserequirement.

All praises and thanks are for Almighty ALLAH Who is the source of all knowledge and wisdomendowed to mankind and to the humanity as a whole. I would particularly like to thank MRS. DR ZairaWahab (Instructor: IU) for many insights she provided us throughout this report. Discussions with herhave also proven most helpful.

This report is based and presented on taxation on edibles. I have conducted a survey on fifty people, askingthem about their income, consumption, etc.

Sincerely,

Syed Hussain Ahmed (11511)

IQRA UNIVERSITY, KARACHI

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TABLE OF CONTENT

SECTION ONE 4

* Introduction 4

Background 4

Review 4

Statement of problem 4

Scope 5

Justification 5

Limitations 5

Following are the design for this topic 6

Hypothesis 6

SECTION TWO 7

* Methodology 7

Research design 7

Population and sample 8

Instrumentation 9

Pilot testing 9

Ethical consideration 10

SECTION THREE 11

* Anaylsis , Summary , Recommendation........................................................11

Analysis 13

Summary 24

Recommendation 24

References. 24

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2012-02-22 Heavy Taxation On Edibles Pg # 1 QUESTIONNAIRE 25-29

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2012-02-22 Heavy Taxation On Edibles Pg # 3SECTION ONE

Introduction

1.1: Background

Means by which governments finance their expenditure by imposing charges on citizens and entities

Taxation on edibles is a very hot issue in the society where income level is quite low. As taxation on edibles

causes lower waged people to suffer in such high inflation and to struggle to meet their both ends. Taxation on

edibles should be kept flexible so that one should not have to cut back his other basic needs to survive.

This research is useful for the people of every society which are striving to have a living. As this research

will prove to be helpful to higher tax handling authorities to adjust any flaws that could sort out the problems of

the society. Nowadays heavy taxation on edibles is getting out of limit.

1.2: Review

We contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying

to lift himself up by the handle

Winston Churchill quotes

When there's a single thief, it's robbery. When there are a thousand thieves, its taxation.

Vanya CohenI am thankful for the taxes I pay because it means that I'm employed.

Nancie J. Carmody

The best things in life are free, but sooner or later the government will find a way to tax them.

Author Unknown

The income tax created more criminals than any other single act of government.

Barry Goldwater

Inflation is taxation without legislation

Milton Friedman
http://www.businessdictionary.com/definition/mean.htmlhttp://www.businessdictionary.com/definition/government.htmlhttp://www.investorwords.com/1940/finance.htmlhttp://www.businessdictionary.com/definition/expenditure.htmlhttp://www.businessdictionary.com/definition/charge.htmlhttp://www.businessdictionary.com/definition/citizen.htmlhttp://www.businessdictionary.com/definition/government.htmlhttp://www.investorwords.com/1940/finance.htmlhttp://www.businessdictionary.com/definition/expenditure.htmlhttp://www.businessdictionary.com/definition/charge.htmlhttp://www.businessdictionary.com/definition/citizen.htmlhttp://www.businessdictionary.com/definition/mean.html

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1.3: Statement of Problem

As families and small businesses are struggling to survive in the current economy. A tax on food andbeverages will have a negative impact on families and an industry that provides hundreds of thousands of good-

paying jobs in communities across the country. Hard-working families are holding their own in this tough

economy, but they can't afford higher grocery prices. There could not be a worse time to ask middle-income

families to pay any more in taxes. These taxes will just further squeeze families already struggling to make ends

meet.

Higher taxes will threaten jobs and stymie job growth. That's the last thing we need in this economy. We

need policies that promote job creation not to demote them.

1.4: Scope

The scope is limited to all households of every society and small businesses who have a hard time to cope with

the taxation that affect their life. As increase in inflation thus increase in taxation on every part of life. Thus this

research is related to every low income household that are affected by the taxation on edibles and trying to repel

it.

1.5: Justification

The justification of this study rests on the following specific consideration:

This research is going to assist the policy markers of government in regarding taxation.

As research conducted on taxation is giving a contribution on lowering or exempting the taxation on

edibles to have a better life.

This research is going to help the households in identifying their right of taxation to sort out Up to what

extent taxation should be charged.

This research can help varies information handler and search engines in addition to their already existing

issues or to update.

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2012-02-22 Heavy Taxation On Edibles Pg # 31.6: Limitations

Following are limitation of this study.

This study is completed in just 60 days (limited time period).

Study conducted by a student. (1st research).

Financing for this research is done by student itself. (limited finance)

1.7: Following are Questions Design for this Topic

Q 1: Should there be any kind of taxes levied on edibles?

Q 2: Whether there should be heavy taxation on prepared meals at restaurant/ clubs?

Q3: Should poor be affected by rise on price of edibles with cost of living increasing?

Q4: Are lower income affected exactly same by heavy taxation on edibles as a middle class & lower

class do?

1.8: Hypothesis

Following is a hypothesis of research.

Undue rising of taxation on edibles cause negative impact on consumers.

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SECTION TWO

Methodology

2.1: Research Design

The following research design was used by researchers to collect data.

2.2: Population and Sample

All the households and people who are affected by heavy taxation, low government income people and the

areas society that is suffering from high inflation, low wages and heavy taxed edibles and struggling to survive.

I have selected the population of 500 from the City Karachi in which I included various Income level

households. Then I have taken a sample of 50 in which 12 households are from DHA town and 18 are from

Saddar town and 18 are from North Nazimabad town. In sample DHA town 6 of them are high income levelhouseholds and 6 are lower income. Saddar towns 9 of them are high income level households and 9 are lower

income sample. And in North Nazimabad town 9 of them are high income level households and 9 are lower

income sample.

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2.3: Instrumentation

The question were designed by research for this study and it consist of ten questions in which eight were

open ended and the last two were hypothesis.

Simple category scale

Multiple choice single response

Multiple choice multiple response

Likert scale

Numerical scale

Multiple rating scale

Graphic rating scale

2.4: Pilot testing

The draft questionnaire was administered on two responded. They were made to fill up questionnaire. This

was done to screen the questionnaire in terms of Wording, Clarity, Meaningfulness and Scoring.

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2.5: Ethical consideration

Following ethical consideration was used to the context of study.

Respondent were assured that the data collected will be secured and will be used purely for research

purpose.

Identification of respondents was kept anonymous.

Before conducting research formal consent was taken.

Language was screened and was not used to challenge or hurt anyone.

Due acknowledgment was given to all those to help who helped in this research.

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SECTION THREE

Analysis, Summary and Recommendation

3.1: Analysis

The data collected through questionnaire is explained briefly in this section.

The following were asked in the questionnaire

Q 1: What income group do you belong to?

Higher level (50,000-Above)

Average (20,000-50,000)

Lower level (Lower-20,000)

Confidential

Higher level 15

Average 40

Lower level 30

confidential 10

According to the survey 44% earn average income

According to the survey 28% earn higher income

According to the survey 15% earn lower income

According to the survey 13%kept confidential

Q 2: How much did you spent on groceries this week?

Below 5000

5000 15000

15000 25000

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2012-02-22 Heavy Taxation On Edibles Pg # 125000- Above

Below -5000 19

5000-15000 17

15000-25000 9

25000-above 5

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According to survey 19 have below 5000 spending on grocery According to survey 17 have below 5000-15000 spending on grocery According to survey 9 have below 15000-25000 spending on grocery According to survey 19 have below 25000-above spending on grocery

Q 3: Do you agree with the Governments regulation of taxation on edibles? In enhancing the economy?

Yes

No

Maybe

Dont know

According to survey have 9 govt regulation is yes According to survey 17 govt regulation is no According to survey 9 govt regulation is maybe According to survey 19 govt regulation is dont know

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Q 4: What type of edibles you think should not be Taxed at all? To provide ease to people?

Meals at restaurants, soda, liquor etc.

Ready cooked meals on deli (canned/packed)

Daily grocery items

Every edible

According to survey restraint meals provide 18% relief. According to survey cooked meals provide 20% relief. According to survey grocery provides 38% relief. According to survey every meal provide 24% relief.

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Q 5: Which class is Financially disturbed by taxation on Grocery edibles?

According to the survey 4 says Elites are disturbed.

According to the survey 10 says middle are disturbed.

According to the survey 27 says lower are disturbed.

According to the survey 9 says none are disturbed.

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Q 6: Should edibles (Nutritious or Not) which lead to obesity be taxed?

STRONGLY AGREE AGREE NEITHER DISAGREE DISAGREE STRONGLY

NOR AGREE DISAGREE

5 people strongly agree

10 people agree

13 people neither disagree nor agree

22 people strongly disagree

5 4 3 2 1

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Q7: How much do you agree on waiving of taxation on the following, In order to sustain the revenue fromedibles?

Dairy products

Legumes (pulses)

Vegetables and Fruits

Obese food (beverages and prepared meals)

7 say obese shouldnt be taxed

10 say dairy shouldnt be taxed

13 say legumes shouldnt be taxed

12 say vegetables shouldnt be taxed

5 4 3 2 1

5 4 3 2 1

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Q 8: How much does taxation exemption or subsidies on following provides relief to you? Upto what level?

At high level Low level

Restaurants meal 6 5 4 3 2 1

Grocery (vegetable & meat) 6 5 4 3 2 1

Basic necessities (pulses etc) 6 5 4 3 2 1

Beverages & packed meals 6 5 4 3 2 1

10 say that restaurant taxation should provide relief.

10 say that grocery taxation should provide relief.

13 say that basic necessity taxation should provide relief.

12 say that beverages taxation should provide relief.

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Q 9: Upto what extent does Reformed General Sales tax (RGST, 2010) on edibles affect the economy of acountry? (It will be going Upto 25 % from 17 % on goods that leave impact on edibles and dairy will be taxedUpto 25%).

100%

75%

50%

25%

According to survey 21 people think 100 %will affect According to survey 11 people think 75% will affect According to survey 10 people think 50%will affect According to survey 6 people think 25% will affect

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Q10: Do you prefer/support taxation on all edibles? Upto which extent? (Place a mark along the meter toreflect your judgment)

According to survey 32% are not happy with regulation of tax. According to survey 18 % are happy with regulation of taxation.

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Q 11: Increase in food expenditure causes the purchasing power of household to decline due to which his socialwelfare declines.

Yes

No

Maybe

Dont know

According to survey 23 say yes According to survey 11 say no According to survey 10 say maybe. According to survey 6 say dont know.

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Q 12: Food purchasing patterns depends on household income & the impact of changes in prices ofedible is much greater in low-income society.

Yes

No

Maybe

Dont know

According to survey27 say yes

According to survey 15 say no

According to survey 6 say maybe

According to survey 2 say dont know

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3.2: Summary

I have selected this topic because it is the root cause of many social and government issues. This research

can help in solving many issues.

When taxation raises the whole economy shoot n hits bang thus hurting the person who are trying to meetboth ends.

1. You may experience extreme taxation as and usually gives rise to inflation which in no time becomes an

uncontrollable fire.

2. You become helpless because you can't do anything about it. You are too powerless to control the high prices

and thus most people suicide or just adopt wrong means to have a living.

3. Its a regressive tax. As a percentage of income, lower-income families pay much more than upper-income

families

4. Its anti-family. Households with several dependents are taxed more heavily as a percentage of household

income than those without dependents.

5. When times are tough you can cut back on a lot of things, but food is such a basic need

6. Taxing food would broaden the tax base allowing for a lowering of the tax rate and funds to provide relief to

low-income taxpayers

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3.3: Recommendation

Policy maker must go through student research to take guide from this research conducted. And take a

guide from this report. Relief for low-income taxpayers can be provided in other ways such as a refundable income tax credit or

government issued food vouchers. This approach better targets the relief

Food purchasing patterns depends on household income low-income households spend their money on

food efficiently by buying more economical brands of food items. Average consumption of fooddeclines with the decline in income

3.4: References:

www.google.com

www.yahoo.com

J-store.org

RGST law book

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QUESTIONNAIRE

Name: __________ No. of family members: ___________ Gender: MALE / FEMALE Age: ___________

Note:

I, student of IQRA UNIVERSITY is conducting a Research on the above given topic, this Questionnaire is formy Writing Research Report; this doesnt mean to hurt or accuse anyone. The information collected or used inthis questionnaire is solely used for research purposes and will not be used for wrong purposes.

*Please shade or mark the following to reflect you judgment.

Q 1: What income group do you belong to?

Higher level (50,000-Above)

Average (20,000-50,000)

Lower level (Lower-20,000)

Confidential

Q 2: How much did you spent on groceries this week?Below - 5000

5000 - 15000

15000 - 2500025000- Above

Q 3: Do you agree with the Governments regulation of taxation on edibles? In

enhancing the economy?

Yes

No

Maybe

Dont know

Q 4: What type of edibles you think should not be Taxed at all? To provide ease to

people?

Meals at restaurants, soda, liquor etc.

Ready cooked meals on deli (canned/packed)

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2012-02-22 Heavy Taxation On Edibles Pg # 1Daily grocery items

Every edible

Q 5: Which class is Financially disturbed by taxation on Grocery edibles?

Q 6: Should edibles (Nutritious or Not) which lead to obesity be taxed?

STRONGLY AGREE AGREE NEITHER DISAGREE DISAGREE

STRONGLY NOR AGREE

DISAGREE

Q 7: How much do you agree on waiving of taxation on the following, In order to sustain

the revenue from edibles?

Dairy products

Legumes (pulses)

Vegetables and Fruits

Obese food (beverages and prepared meals)

5 4 3 2 1

5 4 3 2 1

5 4 3 2 1

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Q 8: How much does taxation exemption or subsidies on following provides relief to

you? Upto what level?

At high level

Low level

Restaurants meal 6 5 4 3 2 1

Grocery (vegetable & meat) 6 5 4 3 2 1

Basic necessities (pulses etc) 6 5 4 3 2

1

Beverages & packed meals 6 5 4 3 2 1

Q 9: Upto what extent does Reformed General Sales tax (RGST, 2010) on edibles affectthe economy of a country? (It will be going Upto 25 % from 17 % on goods that leave

impact on edibles and dairy will be taxed Upto 25%).100%

75%

50%

25%

Q10: Do you prefer/support taxation on all edibles? Upto which extent? (Place a mark

along the meter to reflect your judgment)

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Q 11: Increase in food expenditure causes the purchasing power of household to decline

due to which his social welfare declines.

Yes

No

Maybe

Dont know

Q 12: Food purchasing patterns depends on household income & the impact of changes

in prices of edible is much greater in low-income society.

YesNo

Maybe

Dont know

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