Potential amnesty scheme

Considering that a meagre one per cent, if that, of Pakistan’s population pays taxes, the government plan of a new tax amnesty scheme that would assuage some of the burden on current taxpayers by welcoming foreign money stored abroad by Pakistanis is probably a step in the right direction. In fact, with regard to Panamagate, some in the corridors of power might have wished the proposal came sooner. The timing, otherwise, is suitable for expatriates who have since repatriated to the country in the hope of making personal gains from the improving economy.

With a steady rise in the country’s gross domestic product (GDP), its tax revenue is also ideally supposed to increase which is the case for Pakistan but it should be much higher. Higher revenue collected from foreign shores — stashing away $150 billion according to analysts — could mean increased funding domestically, especially for our health and education sectors that direly require financial aid. While we continue to see growth and development, especially in urban centres, most of the funding is provided by private entities. Also, citizens who most urgently require monetary aid will not have access to many of the facilities being developed.

Perhaps the primary reason people, especially in the business community, choose to move their money abroad is to avoid the corruption that plagues our tax collectors — though tax evasion and avoidance are also forms of corruption. Citizens who pay their taxes, taking true pride in their responsibilities to Pakistan as its citizens, can vouch for the constant scrutiny and random audits by tax collectors trying to collect more than what the government is owed. We hope the new amnesty scheme will be planned and executed to return money to the country. Eventually, we could start seeing higher tax-to-GDP ratios, which will reduce the burden on current taxpayers.

Published in The Express Tribune, April 20^th, 2017.

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