Taxing expats: Opening another avenue for aid

Govt should start taxing expats so that the reserves are filled enough to dispatch money for difficult times


Zahidun Nisa January 14, 2015

To widen its tax base, China has decided to shake the dust off taxation rules and ensure its citizens abroad contribute to the reserve by paying taxes. Tax agencies in the country are trying to get expatriate workers and companies to look back at their native region and pay domestic taxes. This decision has been made as a large number of Chinese locals are heading to different countries to expand their income base.

The situation seems similar to that in Pakistan where, generally speaking, every other family has a member working and earning abroad. Although these people do not use the services of their native states, as argued by Europeans, who are in favour of easing the ‘burden’ of citizens living abroad, some scholars argue expatriates have certain obligations towards their mother country. Emigration does not mean the population will decrease. It merely reduces the number of people who contribute to the tax base.

In Pakistan, governments are constantly at loggerheads when it comes to tax collection. While provincial governments argue about tax payment over the distributions based on the National Finance Commission award, corruption in government departments eats away the amount before it can be used by the government for public service activities.

Given the current state of government-run institutes; they are in dire need of the finances which every government is expected to reserve for them from the taxes it collects. The attack on Army Public School in Peshawar on December 16, 2014 led to the need for stringent security measures in each and every educational institute and they have been asked to not resume classes till their premises are adequately secured. However, some administrations fear they might not be able to reopen ever as they cannot afford advanced and costly security systems.

In instances like these, the government should take a look at the count of citizens who have left for countries with better job opportunities. Therefore, just like in China, in Pakistan too, the government should start considering the option of taxing expats so that the reserves are filled enough to dispatch money for difficult times.

Published in The Express Tribune, January 14th, 2015.

COMMENTS (13)

woody | 6 years ago | Reply

USA expats pay taxes ... but it's a pretty complicated system and Pakistan hasn't gotten the basic tax thing properly implemented. Suggest you get the basic first -- and if your still short of money cut back on military - and only implement expat tax as last resort.

Rumormonger | 6 years ago | Reply

China provides facilities to all tax payers in terms of education and health and security. What will the Expat Pakistanis pay for? Encouraging misgovernment?

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