AUCKLAND: This is with reference to Feisal H Naqvi’s article “In defence of frivolous consumption” (April 18). I agree with the writer’s opinion about kite-flying and wedding dinners, but the analysis of taxes paid by a Porsche buyer is frankly quite silly. Does the writer actually believe that Porsche buyers in Pakistan would be paying 80 per cent of their income in taxes? Clearly, the writer has never looked at a Federal Bureau of Revenue tax return form, in which large purchases can be justified not merely through income, but also from savings carried over from previous years.
In particular, there is a very convenient entry called ‘cash in hand’. All a smart person (or his smart accountant) with a passion for beautiful cars would need to do is to make sure that the entry under this heading be quite sufficient. This is easily achieved in Pakistan, often with the purchased cooperation of the taxman himself. The taxpayer simply declares a large amount in ‘cash in hand’ an inheritance, or a bequest from a generous uncle who also conveniently lives abroad.
I agree with the writer that banning the import of luxury items is pointless when they can be milked for much-needed revenue, at least, at the import stage. But let us not pretend that Porsche/Land-Cruiser/Range Rover buyers in Pakistan are exemplary taxpayers.
Shehzad Shah
Published in The Express Tribune, April 21st, 2012.
