What we do witness, on the other hand, is amnesty schemes for tax evaders, which will only promote more tax evasion.
LAHORE: This government inherited a lot of baggage in terms of outstanding debts, a stagnant economy, energy crisis, spiraling prices, poor law and order, state corporations on the verge of insolvency, a rising deficit, worsening tax-to-GDP ratio and terrorism at its peak. The problems that Pakistan faces because of years of poor governance and failure to enforce the rule of law are gigantic and require immediate measures and decisions to tackle them; otherwise, the situation is very bleak.
In 200 days ever since the government came to power, except for improvement in power generation, the principled decision to initiate treason charges against General (retd) Pervez Musharraf and efforts to curtail crime in Karachi, there seem to be no structural changes, nor reforms in the offing, neither any strategic move to widen the tax base, nor to improve working of state corporations through better governance and strict regulatory controls. What we do witness, on the other hand, is a tax amnesty schemes for tax evaders, which will only promote more tax evasion, because no country including Pakistan has ever managed to increase tax collection through such schemes.
In countries where taxes are collected efficiently, the tax collector puts onus on the individual holding an asset, bank account, movable or immovable property to justify his/her source of income for such possessions. Tax evasion in such countries is considered a highly heinous crime because the very edifice of the state machinery and its obligatory welfare and law enforcement capacity stand shattered if taxes are not collected from the rich and those who earn above the declared minimum annual earnings. As for governance issues, just take the case of PIA, where the government has failed even after 200 days in office, to put in place a professional team of management with integrity and the capacity to enforce vital structural changes in order to arrest the decline and curtail losses and pilferage. Since July 2013, PIA has posted an all-time high loss of over Rs21 billion in just six months, which is comparable with the total annual losses incurred in 2011. Almost the same executives are at the helm, under whose watch, this organisation has gone from bad to worse.
Malik Tariq Ali
Published in The Express Tribune, January 2nd, 2014.
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