Uneven taxation

This paradigm is a mockery of any genuine taxation philosophy

It is a shameful proposition that Pakistan’s rich and the powerful do not pay taxes. It is also a bitter and indiscriminate reality that a gigantic pie of taxation comes from the salaried class. The FBR statistics say that people surviving on hand-to-mouth salaries paid 200% more taxes than the combined emolument paid by wealthy exporters and retailers. The latter ironically are part of the movers and shakers club, who know how to twist the arm of a corrupt revenue generation machinery, and get away with rebates and under-invoiced SROs.

It is heart-wrenching to learn, however, that Rs264.3 billion, almost one-third of total national revenue, was deducted at source or collected from salaried people in FY23, which is Rs75 billion or 40% higher than the previous year. This is because of a number of reasons such as inability of the government(s) to bring the powerful into the tax net, an inefficient and rotten revenue collection department and the overriding influence of elite culture which is eating away into the vitals of statehood.

The country’s taxation mosaic is suspicious with the absence of tax on agriculture, poultry and livestock at source, and negligible or imbalanced deductions on real estate. Incidentally, the salaried class faces the axe in their income in every budget and this year too they had to bear the brunt. Most of the revenue is fleeced from saving account holders as well as electricity, telephone and cellphone bills of those belonging to the lower or middle income strata. This way, they are robbed twice from their dilapidated purse.

Remorsefully, a country that is under abject poverty as more than 50% of its populace lives under the income of one dollar a day, imports automobiles, opens its coffers for civil, legal and military bureaucracies’ perks and privileges, both serving and retired, and enacts a drama when it comes to austerity drive in the corridors of power. To make the taxation more complicated is the enigma of classification between filers and non-filers. This paradigm is a mockery of any genuine taxation philosophy.

Published in The Express Tribune, July 27th, 2023.

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