Importing taxpayers

In its attempts to cast a wider tax net, PTI govt appears to not notice the influential in its own ranks

It appears revenue generation is increasingly becoming a desperate affair for the government. Take the case of its most recent attempt to widen the tax base by modifying the definition of ‘resident Pakistani’.

According to the FBR’s most recent circular, a person will now be treated as a resident Pakistani and be liable to pay income tax if he or she stays in the country for just four months, rather than six, as was the case under the previous tax regime.

Already, Pakistan’s poor and salaried classes are paying through the nose, and it already feels as if everything under the sun is taxed. If this were not enough, the ruling party is continuously scouring the field to expand the country’s tax base, which is fair enough, as these are desperate times and desperate times call for sacrifices.

There is one small caveat, however. In its attempts to cast a wider tax net, the PTI government appears to not notice the influential in its own ranks, much like the predecessors it vehemently derides did. As it milks what will soon be an un-milkable cow, it too forgets the agriculture sector which should, in theory at least, be Pakistan’s biggest source of revenue given that it is an agricultural country.

On the topic of cows, for instance, not only are Pakistan’s big dairy producers barely taxed, rather, they are reaping the benefits of large subsidies or negative taxes. And before one plays the devil’s advocate and tries to justify these subsidies as relief for consumers, it should be noted that Pakistan is one of the handful of countries in the world to impose sales tax on staples such as milk.

It would do well, then, to question just who this negative taxing of the agriculture sector benefits since it surely is not the common citizen. Pakistanis who voted the PTI into power did so hoping that at long last they would have a government that would lead them from the front. As it pushes these austerity-driven policies on the general populace, the ruling party would do well to remember this.

Published in The Express Tribune, August 5^th, 2019.

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