ISLAMABAD: Farooq Tirmizi’s article titled “Fiscal deficit — Government expenditure is not the problem” (January 24) gives little or no importance to measures needed to cover the fiscal deficit other than tax evasion. His suggestion that if the government were to crack down and eliminate tax evasion, the federal fiscal deficit would turn into a surplus, is a bit naïve.
My long association with the erstwhile Central Board of Revenue proved that federal governments have always placed a premium on tax evasion by repeatedly introducing tax amnesty schemes to the detriment of revenue and the discouragement of those who pay all their taxes. Even the last tax amnesty scheme of 2008 brought in only seven billion rupees in the national exchequer, against concealed assets of some Rs350 billion.
Policies needed to get rid of the corrupt tax machinery is simply nowhere to be found. This means that the rampant tax evasion that we see in Pakistan is not going to be reduced anytime soon.
Ex-Member (tax policy) CBR
Published in The Express Tribune, January 25th, 2011.