It has become routine in Pakistan that every government announces a major tax imposition to curtail the black economy
LAHORE: Responding to public opinion and scathing criticism following the Panama Leaks disclosure, the British government has imposed a 15 per cent tax on all second home buyers operating through offshore accounts. This is what differentiates First World countries from Third World nations like Pakistan, where the finance minister announces, on the floor of parliament while presenting the federal budget, a 10 per cent tax on actual profits earned from real estate sales, if sold within five years, only to retract it.
It has become routine in Pakistan that every government announces a major tax imposition to curtail the black economy and then negotiates with known tax evaders to either withdraw or dilute it, thereby consolidating the black economy. It almost seems that in Pakistan, only fools pay taxes. In First World countries, where the tax-to-GDP ratio is high, representation comes with taxation, while the state invests in development of human resources by investing in education, health and the provision of security and other basic necessities of life. In Third World countries, it is the affluent that get tax reliefs, the documented economy shrinks, black money is parked in tax-free real estate and tax evaders dominate parliament with corruption or bribery openly patronised.
Another factor common with corrupt Third World countries is that their ruling elite continues to be beholden to their former colonial masters, contributing to their economies by pilfering their own national exchequer and buying properties, assets and businesses there, announcing mega projects that offer kickbacks. The ‘New East India Company’ operates through willing local collaborators who bleed their national economy and continue to transfer wealth to London and Dubai, making their own countries susceptible to instability because of the widening gap between the rich and the poor. This also helps unfriendly foreign powers exploit and recruit locals, as and when required, to achieve their nefarious designs. Major political decisions are made abroad and even cabinet meetings held there, while political parties are headed by individuals who hold foreign nationalities. Yet, we celebrate Independence Day with such fanfare, all the while negating and rejecting the vision of the Father of Nation, who wanted Pakistan to be a modern democratic welfare state.
Malik Tariq Ali
Published in The Express Tribune, August 23rd, 2016.
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