Tax contribution: Show me the money

Taxation should be considered a civic duty rather than a burden - there should be no honour in not paying.

Nadir Eledroos December 26, 2010
Taxation forms the backbone of state finances.

The military, as an arm of the state, relies on state finances for its budgetary requirements.

As I am often reminded, the Army is in a state of war, so one should support it without any criticism.

However, any commentary that comes through the media or official sources, everyone agrees that the military is underfunded.

A political hot potato

While we are in a state of war, the RGST has become a political hot potato. The opposition has jumped on the anti-RGST bandwagon, while other parties such as the TI and JI prefer the, “taxes imposed under foreign diktat” line of argument.

Whether the RGST is required or not, is a debate for another article. Why those patriotic Pakistanis that should be paying taxes under current tax laws and are not doing so, thus forcing the imposition of the RGST on the already overtaxed, whilst the country is in a state of war is shameful.

Individuals use their influence, power and position to influence tax policy, lobby for exemptions or avoid taxation all together. Others cite corruption and the inability of the state to offer state services, as a reason not to fulfill their legal tax contributions.

These arguments and many others help explain our general apathy towards taxation. However, it is not only taxation where avoidance is common. Money sent home by overseas Pakistani’s often bypasses official channels, making its way through the unofficial Hundi or Hawala networks. Valuable foreign exchange never enters official channels, which could help bolster the nation’s foreign exchange reserves and make us less venerable to and reliant on foreign financing.

All talk no action

Whether the state, and her administration are corrupt or not, shapes our perception and the relationship between peoples wallets and formal channels of finance. Then again, no one likes paying taxes, so whether people would willfully pay taxes even if the state were squeaky clean is also questionable.

The irony is that some amongst us are more than willing to spend a lot of money portraying ourselves as patriotic, though will not part with an equal sum in the form of a voluntary tax contribution. If you happen to be a real estate developer, industrialist or politician, you will get away with paying little or no taxes, however, you will display your patriotism by putting up some billboards leading up to 14th August or 6th September (you know who I am referring to here).

Given that, the Minister of State for Defence Arbab Muhammad Zahir and ex-Defence Production Minster Abdul Qayyum Jatoi are amongst non-income tax filers suggests an extremely casual analysis of the affairs of the defence departments by her Ministers, given that the nation is in a state of war.

Agriculturalists that are exempt from taxes, the industrialists who are lobbying for exemptions, and the self-employed who just do not bother to file tax return, are at the forefront of any sabre rattling opportunity, may it be on the streets or as “experts” on television talk shows.

Put your money where your mouth is

Our nation’s elite has succeeded in reducing patriotism to flag waving, empty slogans and repeating the impotent statement that “all resources required for the nation’s defence will be provided”.

Even if most people disagree with most of my opinions, I am sure we all want a well-equipped, well-trained and adequately resourced military or police, FC, levies, rangers etc for that matter. Our economy and military are dangerously dependent on external financing and no amount of sabre rattling is going to alter that reality.

The country is in a state of war, yet the state’s ability to fight the same war and pay the wages of, equip and train the same soldiers who I am constantly reminded, are sacrificing themselves on a daily basis, depends on foreign assistance.

The least we can do is to articulate a counter narrative that challenges the current “I don’t pay taxes because I have contacts” or “why should I pay taxes, the government does not do anything”. Taxation should be considered a civic duty rather than a burden. There should be no honour in and social acceptability of getting away with not paying ones liabilities.

The fact that some people evade taxes and shape taxation policy to suit their interests is plainly illegal and immoral, and should be treated as such.

Similarly, if you are an overseas Pakistani then you should shun unofficial channels of remittances in favour of legal ones.

Individuals who demand unquestioned nationalism and admiration of the military, are at times the same people who are curiously silent when it comes to building pressure on those individuals who contribute nothing to the state, and by extension the military. That too during a period when Pakistani citizens are being killed either in combat or in going about their daily lives.
WRITTEN BY:
Nadir Eledroos Nadir teaches Economics at Bellerbys College, London and is interested in Pakistani politics and current affairs. He tweets @needroos (https://twitter.com/needroos)
The views expressed by the writer and the reader comments do not necassarily reflect the views and policies of the Express Tribune.

COMMENTS (11)

Ali | 10 years ago | Reply The rich hold a disproportionate amount of the wealth, in many cases via inheritance in the form of the Nawab curse that afflcits Pakistan. They pay nothing because no one can make them. The poor have very little, but becaase they are poor/ powerless, nothing can stop the government, which is a voracious consumer of money, from taking what little they have. The retail tax is just another tax on the poor. The rich don't have to worry about it. The tax maybe 5% of the already meaager income of a poor person, but for the rich it will proabably be something in the order 0f 0.00000000000000001% of their income if that. What we need is a way of taxing the rich. Everything else is waste of time. It will not achieve anything and then the poor will fall into an even further miserable state. Perhaps we should bring in the army to collect taxes. Then may be the army would spend more cautiously and the rich would not get away with out right theft.
Syed Nadir El-Edroos | 10 years ago | Reply @Liaqat: There wouldnt be a need for new forms of taxation or increases in current rates of taxation if people actually paid the original taxes. In a country where tax dodging, stealing electricity and getting away with not paying municipal taxes is considered something to boast about - we are surely stuck in a race to the bottom. anyways, more to my point, today there was a column: Finance Ministry’s advice to PM: No security allowance for civil and armed forces in this paper. Again most of the comments demand that all "resources" should be provided to our brave soldiers. Yet these same people find it beyond their patriotic duty to pay their own taxes or encourage others to do so. No amount of nationalistic rhetoric is going to pay the bills. @Ateeg: You seem to be confirming my hypothesis, I have highlighted the same points in the article. I am not hazed at all by Western notions, they are unravelling themselves as we speak, I am just suggesting that all those people who are overtly patriotic should do more than chant slogans, especially those: landlords, politicians, bureaucrats, industrialists etc who get away with not paying their taxes and also being in a position to influence taxation policy to shift the burden onto those who already bear anunfair incidence on themselves.
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