Not paying taxes


May 05, 2010

KARACHI: This is with reference to the article ‘Tax evasion is the moral equivalent of genocide’ by Farooq Tirmizi (May 4). I have to say that the article is misleading and incorrect. The following key facts would have been relevant. One, the government sets an annual revenue collection target. For fiscal year 2010 it was Rs1,300b.

In the first nine months of this period, revenue collection was Rs1,030b or 74 per cent of the target. Two, the government can borrow from banks, capital markets and so on but it cannot simply print money at will. It also has the option of raising funds through other means such as privatization. Three, shortfalls in government revenue frequently occur because of rising expenditures.

A major chunk of this is government spending on ministries and offices. All these points were ignored by the writer.

COMMENTS (1)

Meekal Ahmed | 10 years ago | Reply What do you mean shortfalls in revenue occur because of rising expenditures? They are two distinct parts of the fiscal equation. We don't collect enough in taxes, and not in an equitable way, and we spend too much. Hence our chronic fiscal deficit which has to be bridged by borrowing.
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