Pay tax? No thanks

Only 128 traders have so far availed the ‘tax amnesty scheme’

To the surprise of nobody other than those that dreamed up this most unlikely of schemes, the government’s tax amnesty scheme appears to have died a death. The Voluntary Tax Compliance Scheme came into effect on February 1 and the expectation by the government was that one million traders would sign up for it by the end of the month and start pouring money into government coffers. At the time of writing, it is reported that 128 traders have signed up and contributed Rs20 million in taxation, a minuscule sum in the overall scheme of things and probably not far off the cost of advertising across media platforms to promote the scheme. Seemingly it was the siren song of some — but not all — of the representatives of the traders, which convinced Finance Minister Ishaq Dar that there would be a strong take-up from the traders and success was assured.



This is not the first time that a scheme to persuade those eligible for taxation to pay their dues voluntarily has been launched. The prime minister offered industrialists, never a group known for willing tax compliance, an amnesty scheme in 2013, which effectively enabled them to launder their ‘black money’. It fell as flat as this latest effort. Quite what the finance minister thought he was doing when he gave the go-ahead is a mystery. He is known for his fiscal conservatism and prudence rather than a man who signs up for something as hare-brined as this has proven to be.

The onus for failure must also be borne by parliament that approved the scheme in the first place. Did nobody question the fundamentals behind this and was there truly an expectation that a million independently-minded traders were willingly going to line up and enter the tax fold? Apparently yes, and the government has not given up yet as it is contemplating a 15-day extension. The Federal Board of Revenue is rightly sceptical as it, above all others, will be acutely aware that the outcome is going to be no different if the extension is granted. Back to the drawing board ladies and gentlemen, and better luck next time.

Published in The Express Tribune, February 27^th,  2016.

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