The finance minister’s decision to impose extra sales tax was recently met with resistance by many. This tax will progressively increase in proportion to the electricity charges of non-filers. The biggest threat to national security and state sovereignty is our failure to achieve economic stability and self-reliance because of tax evasion and loopholes in the bureaucracy.
All economic activity needs to be digitally monitored if Pakistan wants to relieve itself of the economic struggles it is currently facing. Most developed countries collect and assess taxes digitally. Any system of governance — whether it is a free market economy, socialism, or an Islamic-based system — cannot work without tax collection across the board and a welfare system for the most deprived. Over the past few decades, successive governments have promoted tax evasion through repetitive tax amnesty schemes. Unfortunately, the state and its institutions are also involved in institutionalised corruption. They have failed to prosecute those involved in this gross irregularity. The country has been driven to financial insolvency and has resorted to foreign and domestic debts to meet its non-development expenditures.
The failure to collect taxes from large corporations demonstrates how the system is hostage to powerful groups. To ensure economic growth, development and long-term stability, the country requires rigorous economic reforms.
Published in The Express Tribune, September 24th, 2021.