Death and taxes may be the two certain things where this saying originated but the same does not hold true in Pakistan. Tax evasion is a pervasive problem which affects all sector’s of Pakistan’s formal and informal economy and ultimately damages our country’s prospects for development and growth. There is money in Pakistan and plenty of it. But it is hidden in various holdings that are not reported to relevant authorities. Those with cash to spare keep coming up with innovative ways to hide it from the tax man. For the longest time, the real estate sector has been a preferred mode of stashing away excess income which may or may not have come from legal means. Given the complexity of our tax code and the loopholes it contains, it has never been difficult to evade taxes on property. Ostensibly to bring these property owners into the tax net, the government announced an amnesty scheme which at present requires property owners to declare assets by paying a meagre three per cent tax rather than the 35 per cent rate which is normally applicable. Regardless of this huge incentive so far only about a thousand individuals have declared their properties under this scheme according to the Federal Board of Revenue.
It seems that our government has decided that the only way to collect taxes is by offering additional tax breaks to crooks as was evident when the Senate Standing Committee members insisted on December 28 that the government should offer such amnesties to other sectors of economy as well. While salaried individuals continue to pay taxes and indirect taxes result in raised prices of even basic commodities, the best way our government can come up to collect taxes is a bone headed idea to offer even more favours to those who have already cost billions to the exchequer. Even though these schemes have not been successful in the past, the insistence on continuing them shows nothing but shortsightedness on the part of our elected representatives. One can’t help but wonder why offering amnesty is the only way our government can come up with to deal with tax evaders.
Published in The Express Tribune, December 30th, 2016.
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