Dilemma: Only 1.7m pay taxes in Pakistan

Syed Ali June 14, 2010
As always, we have to blame the other for our actions. No wonder Pakistan is at the verge of being globally labelled as a “failed state” and many countries do not want to be diplomatically associated with it.

Conspiracy theories are something we live for, and do not even have the courage to verify. Most conspiracy theories come from sources who feed on propaganda purposely or only for “speaking the public’s language”. But we will not learn and be truthful to ourselves. Because we just like believing in them.

The media is talking about Pakistanis not paying taxes, that only 1.7 million are managing the 180 million of Pakistan. Is this again the agenda of the rich to keep the nation focused on these tax payers or are we trying to deliberately ignore the fact that every single Pakistani is paying taxes? Besides Pan, Gutka and various unbranded food products there is GST (better known as the General Sales Tax), which was just raised by a certain percentage to “show” the IMF that we can do without the suggested VAT scheme.

By October if it doesn’t work out and it is most likely it will not, then the government gets away with the additional 1% and we will end up with VAT, because by then the media would have already made up your mind that VAT is better than GST and the 1.7 million will remain 1.7 million, the same as before. The fact is that everyone does not pay income tax, but everybody does pay the sales tax on purchases, utility services, and fast food too!

Our problem is corruption, and until this problem is not controlled, we can bring in any kind of budget claiming to offer relief for the people. It will just not work, and the conspirators will continue to have you believe that it’s the IMF, WB, or the USA forcing you into this.

The sad part is that most of us believe in this because we are so vulnerable to be caught off guard, as we are weak and they are strong. The government needs to concentrate more on reforms within itself, rather than putting pressure on the public. If FBR has to be privatised to improve its functionality then there should be no thinking about it. But please, give it to professionals, not the KESC management.

IMF asks us to generate income, we say, no problem, we have everyone using fuel and energy, let’s get it from here? Why wasn’t duty increased on luxury vehicles in this budget? Why on electronic goods only? We ask for tax on income from farmers and landlords, but we don’t realise that it will be us paying for it after all. The prices of produce will shoot upwards to cover this extremely influential category of income. However, for the sake of uniformity in a society tax on income must be established for everyone and this sector must be taxed to increase income for the country.

Who worries about our income? Compared to last year we need 30% extra to maintain the same lifestyle we used to, and this percentage is not going downwards, rather we hear of an increase in unemployment and closing down of industries almost everyday. Banks are filthy rich, but not ready to bring the money out in the market, because of uncertainty. Instead, they have been working on squeezing the limits to their comfort levels, not worrying that the customer may end up in the suction hole of bankruptcy. This is exactly how the IMF and WB may take Pakistan, we are in a burden of debt and chances of recovery appear dim with the current policies.

How about leaving this burden on the 1.7 million to pay it off, shall we?
Syed Ali A businessman who writes on politics and civic issues. He completed his masters in business administration from Boston University. He tweets @abidifactor.
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