Tax disclosures

The tax disclosures does absolutely nothing to actually crack down on people who are not paying any taxes at all.

If the government believes it can release a database of incomplete information and expect that its duty to crack down on the culture of tax evasion is done, they are sadly mistaken. The massive volume of data about taxpayers in Pakistan that was released this week by the government may seem like an audacious move, but in fact reveals very little useful information, and does almost nothing to actually move towards solving the problem of tax evasion.



For instance, the tax disclosures of many senior government officials state how much they paid in tax, but not how much they earned in income, leaving the reader to wonder whether or not these officials paid the total amount that they owed. This is not a trivial question: one official openly admitted to this newspaper that his tax information in the database exaggerates the amount that is actually withheld from his salary. If senior officials are not paying the amounts they claim to be paying, then what was the point of releasing the taxpayer database in the first place?

This newspaper opposed the release of what we believe is private financial information of individuals who did not ask for, nor did they expect, their data to be made public. Given the government’s abject failure at securing the lives and property of citizens across the country, we believe that it was highly irresponsible to publish information about how much taxes people pay. It exposes hardworking, honest citizens to threats from criminals and does absolutely nothing to actually crack down on people who are not paying any taxes at all.

If anything, the database shows just how limited the Federal Board of Revenue (FBR) is in its ability to prosecute tax evaders. The FBR has no way of knowing whether the claims being made in the tax returns people file are accurate. The FBR’s audit department is woefully understaffed and rarely undertakes audits of any large tax evaders. Making public information about honest taxpayers does nothing to change the basic fiscal problem in Pakistan: that the FBR is neither capable nor willing to collect taxes from the rich and powerful.

Published in The Express Tribune, April 21^st, 2014.

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