KARACHI:
A nation-state that cannot collect taxes from all citizens earning above a certain declared uniform threshold income is bound to become economically non-functional. It becomes susceptible to compromising its sovereignty and may even lose its vital defense deterrence capability. Unfortunately, the current state of affairs in the country shows a lack of progress in this area.
There exists a top-heavy, overstaffed Internal Revenue Department, Customs, and Excise Department, along with other administrative non-development expenses. All of this is funded by the state, yet their primary objective of achieving uniform tax collection remains unaccomplished. The assets owned by state employees and their families reveal the corruption and decadence that have persisted for decades. Despite political rhetoric and loud claims by state institutions, Pakistan faces a crisis that threatens its very survival. Pakistan joined the IMF regime but did not sign any Standby Arrangement with them until December 1958. Since then, successive governments have widened the gap between revenue collection and expenditures. This has resulted in extravagant lifestyles for the elite, while the national exchequer revenues and forex reserves have dwindled, and deficits have been bridged by taking more loans.
Currently, the black economy overshadows the documented economy, and the state even supports it due to conflicts of interest and greed at the top level. There seems to be no sense of remorse for this damaging behaviour.
Malik Tariq Ali
Lahore
Published in The Express Tribune, July 5th, 2023.
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