We cannot blame the IMF for not levying taxes on profits in real estate sales, or the stock exchange business.
LAHORE: The International Monetary Fund (IMF) has become the perfect punching bag for everybody, including those who are the country’s biggest tax defaulters, members of the powerful political elite and our bureaucracy, which have never allowed the economy to be documented, because this would curtail institutionalised corruption and prevent flight of capital.
What is wrong if the IMF has asked the government to raise the tax-to-GDP ratio to a level comparable with the more developed countries of the world? In such countries, details about sources of income, assets owned by citizens, ownership of movable and immovable property, criminal and immigration records, etc. are all documented and available for the state and no person can operate a business, charitable organisation, religious organisation, indulge in any legitimate activity or transfer funds, without registering with the relevant state regulatory bodies, which in turn, are linked to the central data collecting network of the governments of these countries.
The choice to levy direct taxes on all citizens earning above a specified limit lies with individual countries, which can either choose to follow their constitutions and universally-accepted norms for good governance in letter and in spirit, or protect vested interests. If the Pakistani state has chosen to provide expensive real estate to its bureaucracy instead of to the homeless, the IMF or the World Bank cannot be blamed for this state of affairs. It was not the IMF, which allowed old, inefficient machinery to be imported for generating electricity, or for the politicisation of the issue of generating cheap hydel power. It was the bureaucracy and our governments, which preferred lucrative kickbacks up front during their tenures, instead of focusing on building the country’s hydel power infrastructure. We cannot blame the IMF for not levying taxes on profits in real estate sales, or the stock exchange business, for the countries that control the IMF, levy such taxes in their respective countries. For any self-respecting ruling elite, sarcastic statements by numerous foreign figures, such as that of former US secretary of state Hillary Clinton, would have been enough to force them to impose direct taxes upon the rich. Instead, the reverse has been done, leading to massive inflation, unemployment, rise in crime and depreciation of the rupee.
Malik Tariq Ali
Published in The Express Tribune, October 8th, 2013.
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