Of Tax and Amnesty Schemes


Tax collection has forever been a concern for Pakistan. I don’t remember the last I heard that the tax collection was as per the potential. But since it never happened, our budget deficit continued to increase every year and we had to resort to borrowing to fill the gap. Over the years so much effort put in to increase the tax net but it never reaped the desired results. According to the 2018 report an astonishing 1% of Pakistan’s population is tax payer. This is beyond belief. How can a country survive, run and give for its people in such a scenario?

Growing up, whenever I asked my dad, a seasoned journalist and hardcore patriot, about tax collection in Pakistan he always said that people are not sincere with country. Further he used to say that one must stop all those persons driving luxury cars and should ask them how much tax they have paid but no one has ever done that. Then he used to give example of tax collected from Liberty market, Lahore which was PKR 80,000 to 90,000 in the mid-1990s not even peanuts compared to the business of the market at that time. This was something late Benazir Bhutto also mentioned in one of her talk and listening to her words gives you the horrific picture of how the authorities are least bothered leaving a sitting Prime Minister helpless and in duress.

One of the arguments of not paying tax is that they will not spent on the country’s development and instead will go into the pockets of the politicians. I will not lie; I used to think on the same line until the reality of things got in my head and I realised my assumptions were wrong. The countries across the globe survive primarily on the money received from tax along with other sources and this leave no reason to not pay the taxes. The question and concerns can wait. It is our duty as nationals not a choice.

Amnesty schemes one after the other launched to somehow bring the tax evaders into the tax net but have predominantly failed to bring in the required numbers. And instead of doing analysis of why the scheme failed we prefer to launch a new lucrative one. If people are not paying taxes then the institution (Federal Board of Revenue) is also not working as it should because of the inefficiency. Such schemes can only work if the reforms in the institutions are also made and the non performing elements should be shown the door. It needs overhauling more than anything else. There is nothing in terms of resources that the institution lacks apart from commitment to the cause, perhaps. It is otherwise well equipped to cater the needs of the modern times, if used properly can give the desired result. We don’t need a new system. We need change in the mindset, definition and assertions.

The last amnesty scheme launched by PMLN on 30th June 2018 saw more than 55,000 people availing it and paying PKR 97bn. The numbers are not quite appreciative but still it started the process by giving them discounts and no questions asked like benefits. However, it faced strong opposition and criticism from PTI all across. They did every imaginable thing to discourage people but despite of all that people volunteered which also included Imran Khan’s sister Aleema Khan.

Then we saw PTI coming into power after the process of selection and after much deliberation they also joined the amnesty bandwagon only after a year of voicing against it. But now it seems fine. Before launching their own version of the scheme they made amendments in the ordinance promulgated by the President of Pakistan which prohibited non filers from the buying of land and car through mini budget. We will now have to see how it panes out amidst high hopes from the government on this ‘Halal’ amnesty scheme. Despite of the assumed benefits what was the point of doing it all over again?

This is where we have been wrong for all these years – lack of consistent policy. We never gave those who availed schemes in the past to develop the habit of paying the taxes. Every incumbent government launches its own plan instead of carrying on the already implemented one. They don’t realise that it creates a negative impact. How impatient are we for point scoring that we forget everything else. We first dent confidence of the tax payers and then expect them pay the tax. It cannot happen like that. In a society like ours where tax evasion has become a moral responsibility presents a strong case for educating the people and gaining their trust. But the institution has continuously been doing the opposite. The frequent amnesty schemes and others have not yielded the desired result that’s why we still have just 1% of total population paying taxes, majority of them salaried class. Initially they look productive but in the long run they have failed and that is only because of the ever-changing regulations. Any scheme should at least last 5 – 7 years at the same rate and once they have become use to pay taxes the percentage can increased gradually. The institution must not forget that every little helps and its better than nothing.

The institution itself pushes people towards tax evasion and then cries foul. They keep sending people notices and chase them after they have availed the benefits of the reprieve. They want to suck every rupee out of them in one instance. Ideally the institution should leave them alone and wait for the right time. There is a potential of increasing tax collection but it needs patience, persistence, conviction and application. And the people in Federal Board of Revenue lack them dearly but expect the tax payers to have them. The institution also lacks enough data and the system to get to the neck of tax evaders. It is time we take giant strides in digital economy.

Once the rich and wealthy are in the tax net and have become consistent then the attention should shift to the undocumented part of the economy – street vendors, taxi drivers, mobile and computer sellers and other such businesses. This would need further planning, laying the slabs per their affordability and take it further step by step. The main hurdle will be educating the people and the local bodies can be utilised effectively for this task. Let’s just hope we as a nation can step up and become implementer(s) in addition to the planners, something we have always faltered in.

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Let it be, please.


Source: Corruption Watch

We are in the 10th month of the PTI government and in that short while we have seen it all: incapability to address issues, mini-budgets, cabinet shuffle, resignation and incessant clamouring. PTI probably would be the only party in the world who still has not come to term with the fact that they’re in the government now, not on the container anymore and they have to start acting like one before steam runs out. In the five years when PTI was in the opposition, they bashed the sitting government of PMLN for every other thing. They seemed to have an answer for everything until they formed the government. They stalled the progress of the country in every which way: 126 days dharna (they seemed so proud of it that they offer fully sponsored opportunity to opposition) in which the current Prime Minister mentioned umpire’s finger is about to rise every day without fail and the frustrated PTI went on to support the questionable Faizabad sit in. But despite all the obstacles PMLN went on to complete the five years term, only the second time since 1947. In all that time, PTI was aware of challenges ahead for them and the state of the economy because of their actions still they didn’t have any plan when they eventually formed the government. PTI delayed going to the IMF to seek financial assistance for some strange reasons and the rest is history.

So far, we have only heard the blame game from the government. They have not missed a forum to malign the PMLN and PPP for the crisis faced by the country: in the press, National Assembly, Senate and talk shows. If they had shown the same diligence with which they have continued to level charges against the previous government things would have been different. But their concentration and focus remained on one thing – corruption. Beyond that, they have no argument to counter PMLN now sitting on opposition benches. The baseless numbers they have claimed and failed to justify with evidence could have easily been avoided. But they chose not to. PTI government should have known or somebody should have told them that mere allegations are not enough and that they must give evidence of the same. Yet the mudslinging saw no end and perhaps never will till PTI is in power because they don’t have anything else in the goodies bag they promised to the people of Pakistan.

Apart from all of this, PTI has failed to run the Parliament in the proper way. No real legislation has been done so far – the sole purpose ministers and senators are there. If they’re so concerned about corruption then why PTI has not tabled a bill against it yet? This is the only productive and result oriented way of action. Whatever has happened in the past is now buried; we have present and future in front of us so why not ensure it won’t happen anymore? But all elected ministers do during the session is hurled allegations and leave wasting the precious resources of the national exchequer. If there is a way of putting things right and somehow end corruption it is via Parliament. It is another matter that corruption cannot be eradicated but can be controlled. This can only happen when the Parliament and system are considered supreme and not the containers. The system itself needs time and effort to evolve and mature which sadly it never got and allowed. So far, we have seen exactly the opposite from the government: incessant clamouring without any real considerable effort.

The bitter truth is that the system was never allowed a chance to grow and mature since Independence. It was always hijacked and derailed in the name of the fight against corruption, something PTI also keep crying foul about but like its predecessors has done nothing to combat the menace. What actually happened instead of eradication of the corruption is common knowledge – a many-fold increase in the business empire. What actually was achieved from the derailing of the system and abrogation of the constitution every so often? The misadventures have only created problems for the country and only served the vested interests of the parties involved. One fails to understand why as a nation we take it upon us to solve a matter instead of going for the legal course of action? How can the people who are only trained to protect the borders run a country? The results are evident and the country is still suffering from it. The politicians are not innocent but they’re not the main culprit until the system is allowed to function freely. While deliberating on the progress of the country we often forget the 34 years of military dictatorship and how judiciary always approved the abrogation of the constitution. These stints have resulted in the fall of Dhaka, terrorism, crippled economy and three imposed wars. They failed to bring discipline in the institutions and steer the country and have always ended up looking for politicians to help them out.

As if it was not enough, they try to steer government from the backseat and do political engineering for the years’ power was not directly with them. It is rather unfortunate that since independence Pakistan has not seen free and fair elections. Only in the 2018 elections, the spend was Rs.21 billion and an astonishing three hundred and fifty thousand army personnel were deployed across the country on the Election day. If they have to select the government then instead of the charade might as well select and save national exchequer the cost. As a nation, we have not learned from the past and continue to make the same mistake religiously. Why these forces cannot let the democratic system run and flourish? What harm it does to them? What else will make them realise that?

There are problems and loopholes but the system can fix them over the period of continuous running but not when it has to make a fresh start after every 10 years or so. Can we blame a child for anything? No. Similarly, a system which has remained in infancy since Independence cannot be questioned. It took 200 years for the democratic system to mature in the United Kingdom and they worked for it patiently. It has reached a stage where people cast vote to the manifesto and what the party has managed to deliver in its earlier tenure. There has not been a single martial law in India since Independence which we got together from the British Empire. As a result, the system has grown and fast reaching the desired maturity levels. There has never been a hue and cry over the rigged elections. There are many other examples of the countries where a system is running in its full form and the pillars of the state do not meddle in each other’s business and work independently towards one goal – progress. This certainly doesn’t mean there aren’t any problems and issues but they have the system to deal with them not the container and backseat drivers.

According to Transparency International, corruption means, “Generally speaking as “the abuse of entrusted power for private gain”. Corruption can be classified as grand, petty and political, depending on the amounts of money lost and the sector where it occurs.

Grand corruption consists of acts committed at a high level of the government that distort policies or the central functioning of the state, enabling leaders to benefit at the expense of the public good. Petty corruption refers to everyday abuse of entrusted power by low- and mid-level public officials in their interactions with ordinary citizens, who often are trying to access basic goods or services in places like hospitals, schools, police departments and other agencies.

Political corruption is a manipulation of policies, institutions and rules of procedure in the allocation of resources and financing by political decision-makers, who abuse their position to sustain their power, status and wealth.”

Going by the above classification bringing corruption to an end is insurmountable ask so instead of wasting time clamouring about it some active measures must be taken. Why not work on the system and ways to deal with corruption? Why not introduce legislation and constitutional reforms? Why not let the system sustain itself for good 20-25 years? Why not show some restraint in abrogating the constitution and derailing the democratic system? When the system will reach maturity it will have the ability to become a hurdle in the way of corruption. Transparency and accountability are the by-products of the democratic system. We don’t necessarily need to put in extra effort or set up a separate office for this purpose.

My sixteen years old niece schooled me a few months ago that politics and corruption go hand in hand and you can control it but cannot minus one from the other. I learnt a lesson and started talking about the system more than corruption. The sooner we will understand and make a collective effort for the progress of the system and country at large the better. Pakistan Zindabad.

To Whom It May Concern


 

Imran Khan led Pakistan Tehreek-e-Insaaf secured majority in the 25th July elections. They went on to form the coalition government in only the second consecutive transfer of the power in the 70 years history of Pakistan’s existence. Unfortunate but at least it is happening now and hopefully it will continue and one fine day the democracy will mature in its true form. Continue reading

25th July – Election Day


On the 25th July Pakistan will vote to elect a new government and a prime minister. The popular anthem these days is tabdeeli and naya Pakitan just  like Bhutto’s popular slogan ‘roti, kapra aur makan’. Politicians have the knack of playing with the emotion and sentiments of the people and ignite them by using a psychological slogan. Continue reading

Dearth of Leadership


In search of a Leader

A statesman is usually a politician or other notable figure of state who has had a long and respected career in politics at the national and international level. When politicians retire, they are often referred to as elder statesmen. This may be true for many countries around the world but this happens rather rarely in our country.

Statesmanship also conveys a quality of leadership that organically brings people together and of eldership, a spirit of caring for others and for Continue reading