Cutting aid to Pakistan
Why should a foreign country pay for improving the lot in Pakistan when its wealthier citizens do not pay taxes?
According to the Pakistan Board of Revenue, only 0.57 per cent of Pakistanis paid income tax in 2012. PHOTO:FILE
Britain is expected to increase aid to Pakistan to $675 million in 2014. However, British lawmakers are pushing to block this increase because Pakistan has been unable to develop a proper system of tax collection and distribution. This is not an unreasonable argument and, in fact, can be seen as a welcome acknowledgement by a foreign country regarding Pakistan, for why should a foreign country pay for improving the lot in Pakistan when its wealthier citizens do not pay taxes? Moreover, this also reflects a realisation that unless it pushes for aid to be applied in a non-profligate manner, future funds for Pakistan may be squandered. Pakistan should be asked to provide detailed reports about where the assistance is being used, be it on health or education projects.
The British parliament’s International Development Committee contended that “Pakistan’s rich do not pay taxes and exhibit little interest in improving conditions and opportunities for Pakistan’s poor”. According to the Pakistan Board of Revenue, only 0.57 per cent of Pakistanis paid income tax in 2012 — most likely the honest, working middle class. Unfortunately, we have not had sincere governments in the past to show us the fruits of any taxes we have previously paid. If all citizens regularly paid taxes, we could potentially have stronger national security, better conditions in our government schools — including an improvement in the quality of education provided — and safer, more durable roads that connect to even remote parts of the country.
Despite the fact that there is vast poverty in Pakistan, there is wisdom in the British lawmakers’ stance. For 25 years, no person has been held accountable for income tax fraud and less than 30 per cent of our members of parliament pay taxes. Tax should be collected based on a percentage of income, if the income is above poverty level. There is a dire need to develop a system of checks and balances on who is earning what and through what means, which should elucidate the numerous black money practices in our economy and help government analysts understand the situation in order to improve it.
Published in The Express Tribune, April 7th, 2013.
The British parliament’s International Development Committee contended that “Pakistan’s rich do not pay taxes and exhibit little interest in improving conditions and opportunities for Pakistan’s poor”. According to the Pakistan Board of Revenue, only 0.57 per cent of Pakistanis paid income tax in 2012 — most likely the honest, working middle class. Unfortunately, we have not had sincere governments in the past to show us the fruits of any taxes we have previously paid. If all citizens regularly paid taxes, we could potentially have stronger national security, better conditions in our government schools — including an improvement in the quality of education provided — and safer, more durable roads that connect to even remote parts of the country.
Despite the fact that there is vast poverty in Pakistan, there is wisdom in the British lawmakers’ stance. For 25 years, no person has been held accountable for income tax fraud and less than 30 per cent of our members of parliament pay taxes. Tax should be collected based on a percentage of income, if the income is above poverty level. There is a dire need to develop a system of checks and balances on who is earning what and through what means, which should elucidate the numerous black money practices in our economy and help government analysts understand the situation in order to improve it.
Published in The Express Tribune, April 7th, 2013.