KARACHI:
Around the world, businesses and individuals evade taxes with the help of lawyers who manoeuvre different laws to offer clients leverage. However, it is rarely done as defiantly and openly as is the practice in Pakistan. Financial crimes and tax evasion are considered a conspiracy against the state in the developed world and those caught face strict punishments. No system of governance can function without tax revenues levied uniformly on all sources of income.
Today, Pakistan is facing an economic crisis that threatens our national security and state sovereignty. The problem is not with tax amnesty schemes, which if implemented in the true spirit of laws and regulations can widen the tax net and increase revenues, but the lack of political will and honesty of those in power to penalise those who defiantly refuse to pay taxes and declare all their taxable incomes. The defiance with which tax is evaded and the ease of doing undocumented business in Pakistan and the conflicts of interest haunt the country. When over 55% of all commercial business ventures are owned by foundations which enjoy tax exemptions and subsidies then the economy is bound to collapse.
Despite being a profitable sector, the real estate sector enjoys repeated tax amnesty schemes and minimal taxation. Across the country, many business ventures do not accept credit or debit cards. The Federal Bureau of Revenue and other law enforcement agencies are aware of these violations and defiance but have done little to act against them. Naturally, this has affected government revenue and hampered overall economic growth. Consequently, foreign debts and loans have escalated beyond limits and have raised the risk of insolvency.
Malik Tariq Ali
Karachi
Published in The Express Tribune, January 13th, 2023.
Like Opinion & Editorial on Facebook, follow @ETOpEd on Twitter to receive all updates on all our daily pieces.
