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)
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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.
China provides facilities to all tax payers in terms of education and health and security. What will the Expat Pakistanis pay for? Encouraging misgovernment?
Shameless jealousy with expats
First make your collection corruption free & widen your own tax base, which has shrunk from last govt. So, what do you have to say to that ? do not compare with CHINA where people pay taxes ec; & do what they are told to do, unlike us. First, become like CHINA than try to suggest tax reforms etc; do not try to kill the hen laying golden eggs....try to collect $ 15 billion yearly in local taxes, then tax the expats....if we have friends like you, we do not need enemy.
That's absurd, except for the people working in the middle east, they are already paying taxes to the state where they are earning there livelihood.
This is a ridiculous argument. To pay tax one needs to use the service. That is the basis of tax collection system.
The emigrant went on their own to seek life and liberty in pursuit of happiness. I believe they also pay taxes where they live and work. Taxing them again in PAK because they were born there is tantamount to "children of slave parents are slave too" justification.
No individual has any obligation to any state. An individual is born free. The state is not a ruler of an individual, but the individual is the master of the state.
Citizenship and tax collection by a state is a honorable contractual obligation between an individual and state. It is a bond established by mutual trust. State (king) has a moral obligation to protect all the citizens regarless of who pays the tax. That is how statehood was evolved. A homeless person does not pay tax, yet the state is contractually obligated to protect him because he is in that state. Similarly, the state where expats are living has a moral obligation to protect all the people in that land, expats or not, tax payer or not.
It is because of the same moral obligation countries are obligated to host the refugees / asylum seekers.
Why not tax the relatives of the dead? The dead are occupying a piece of land, doing nothing, and the state is protecting the dead.
Expats are vital to PAK economy. What if they stop their remittances and instead save it abroad?
First rule to become a King: Subjugate the enemy that threatens the authority, Tax the citizens as little as possible, collect taxes rigorously, reduce waste(eliminate subsidies, corruption), increase efficiency in government and deliver the service. Not very hard. In PAK case, reduce defense spending and stop the centrifuge.
All Governments from day one operate on deficit. They borrow money from local or international market mortgaging the citizens ability to produce by creating an ideal environment(education, law and order, infrastructure etc.). Instead, PAK spent her money on expensive toys which are of no use to anyone.
How about before you make new laws, you enact on the old ones. Pakistan's tax policy is quite comprehensive, but tax collection abysmal. Thats where the problem is.
WHAT!!! ... unbelievable... Have some shame for writing such a short-sighted article. Expats are contributing so much to the Pakistan's economy and sending back home remittances as much as are Pakistan's exports. I am stunned at the obliviousness of the writer to the problems expatriates face in and outside Pakistan. It's a shame that rather than emphasizing on granting special privileges to expatriates writer is talking to bring those further down.
ridiculous article. the problem in pakistan is high level of tax evasion, loopholes and ongoing corruption. A large part of the reserves are on account of worker remmittances - start taxing those and not only do remmitances start to dry up and reserves go down but also adversly affecting families who are dependent on these inflows.
I disagree with the logic. Instead of widening tax base and focusing on recovery within Pakistan, which would give us more than enough to sustain and grow the country; we are accepting defeat and hoping to tax more honest people. The country cannot be run with two classes... one that contributes and another that does not. Instead of wasting energies in trying to find innovative taxes... we need to have a single aim.. bring tax evaders into the net. Period.
Now can people who work in another country for a living get taxed here in Pakistan? Ever wonder what will happen to the billions of dollars expat apkistanis send to Pakistan if they start getting taxed. This idea is a non-starter. We cannot even document/tax the people who live in Pakistan, how can an inefficient and corrupt govt. machinery ever be able to bring exapt pakistanis into the tax net?
Tax remittances and people will start sending money through informal channels. This is exactly what you don't want to happen. No this move would be a step backwards.
Keep in mind that remittances spent locally result in indirect taxes for the government. I mean GST, FED and WHT even. So it's not entirely tax free as it is.
No, Thank You. Not unless the people residing in Pakistan pay their dues first. We are already set to contribute $18 billion worth of foreign exchange this year to balance your import bills. We will NOT bear the cost of your corruption and incompetence.