Tax defaulters on notice

There are many things that those who point fingers at the faults of Pakistan identify, but close to the top of the list of most of the finger-pointers is taxation, lack thereof. It is not difficult to see why. Estimates vary but it is likely that only around 2 per cent of those that have an income sufficient to levy tax actually pay any. The real figure may even be lower than that. There has been little by way of aggressive enforcement of taxation laws or procedures and upsetting the tax avoiders is something no government of recent times has ever done with any degree of seriousness. Now a radical proposal has appeared that if implemented uniformly and without fear or favour could revolutionise tax collection. The Public Accounts Committee (PAC) on Tuesday proposed a set of constitutional and legal amendments that would suspend the national identity cards of tax defaulters and bar the judiciary from granting stay orders for longer than six months in cases relating to financial matters.

The proposal has its origins in the fact that over Rs300 billion of tax revenue has been ‘stuck’ in litigation, much of it for many years as stay orders have been granted by the superior judiciary, along with weaknesses in the legal defence teams of the Federal Board of Revenue (FBR). The chairman of the PAC is pleading that there are hurdles in the way of tax collection including the aforementioned stay orders which are supported by Article 199(4)A of the Constitution. A further hurdle is provided by the Inland Revenue’s own tribunals that have officers of the FBR sitting on them which also deliver stay orders.

The incestuous nature of these various relationships has long been maintained, and virtually guarantees tax non-payment which is in effect sanctioned by the very authorities tasked with tax collection. Were the PAC move to suspend the CNICs of defaulters be successful then there would be howls of pain across the land. Thus far the chairman of the FBR has said that the PAC does not have the legal powers to proceed as he wishes, but it would seem that the move has the support of the Auditor General. ‘No pain, no gain’ goes the saying.

Published in The Express Tribune, April 27^th, 2017.

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