KARACHI:
The economy is bound to collapse when governments are hostage to their conflicts of interest. A necessity for any state to function is to collect enough revenues through direct taxation and export earnings to meet its expenses and save enough reserves over a period of time to meet any emergency. Indirect taxation should only be resorted to after all avenues involved in commercial enterprises have been exhausted.
Unfortunately, in Pakistan levying indirect taxation is the preference and this impacts both affluent and poor sections of society uniformly. A state that accommodates the affluent with endless tax amnesty schemes, waivers and reliefs in terms of exemptions and reduced rates of taxation, ends up overburdening both the salaried class and the lower middle class, including those living below the poverty line. These people driven to desperation are bound to protest. The anger on the streets over electricity bills might be orchestrated by vested political interest groups. But the increase in unit charges and indirect taxation have definitely raised frustration and anger.
Other than a reasonable levy of general sales tax (GST), all other deductions need to be reviewed. Successive governments have failed to stop electricity theft, which runs into hundreds of billions of rupees assumed as line losses. The conflicts of interest among the leadership have prevented any punitive measures. Politicians and other stakeholders must realise the gravity of the situation and the anger that is building up. They must realise that the tactics they once used are now being used against them and urgently act to quell the masses.
Malik Tariq Ali
Lahore
Published in The Express Tribune, August 29th, 2023.
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