Naming and shaming: Cabinet ministers, MPs pay nearly twice as much in taxes in 2014

Over 11% legislators refuse to file tax returns, overall tax base falls well short of FBR target

ISLAMABAD:

The Federal Board of Revenue’s naming and shaming strategy appears to be having an effect on at least one group of people: parliamentarians. As a group, national lawmakers paid 88.3% more in taxes in fiscal year 2014 compared to the previous year, with cabinet ministers paying 90.6% more compared to last year.

This information was revealed in the data from the second tax directory of parliamentarians for the fiscal year that ended June 30, 2014. The document was released by Finance Minister Ishaq Dar on Friday, and revealed that a majority of politicians only declare their salaries from the National Assembly or Senate as the income on which they paid any taxes.

Overall, parliament’s contribution to government revenue remains a paltry Rs239 million, an average of Rs594,763 for each of the 401 members of the National Assembly and Senate. However, this number is a substantial increase over the Rs127 million paid by parliamentarians last year.

Yet, despite the naming and shaming of parliamentarians, some legislators were still brazen enough not to file their tax returns, including Commerce Minister Khurram Dastgir and National Food Security Minister Sikandar Bosan. Overall, Dar said that out of a total 1,169 members of the Senate, the National Assembly and the four provincial assemblies, 1,040 (nearly 89%) have filed their tax returns whereas 129 members have so far not filed their returns.



The tax contribution of 96 Senators of Rs122 million was more than the Rs116.6 million paid by the 305 members of the National Assembly. On average each senator paid nearly Rs1.3 million in taxes compared to an average of Rs382,295 contributed to the exchequer by each MNA.

In total, 857,000 people filed income tax returns in the last fiscal year, said Dar, highlighting the Nawaz Administration’s failure to meet its own goal of broadening the tax base to 1.2 million filers.

Several parliamentarians and cabinet ministers saw a dramatic increase in the amount of taxes they paid, which either reflects an abnormally large increase in their incomes, or an increasing willingness to pay the taxes they owe on income levels that have not changed much over the course of the last year.

Prime Minister Nawaz Sharif paid Rs2.6 million in income tax, Rs35,664 less than the previous year. His brother, Punjab Chief Minister Shahbaz Sharif paid Rs5.2 million in income tax compared to Rs3.6 million last year.

Leader of the Opposition Khursheed Shah paid just Rs100,054 in income tax, compared to the Rs62,214 that he paid last year.

Among the chief ministers, Sindh Chief Minister Qaim Ali Shah paid Rs111,772 in income tax as against Rs33,724 in the previous fiscal year. Khyber Pakhtunkhwa Chief Minister Pervaiz Khattak paid Rs660,619 in income tax compared to Rs300,494 he paid last year. His counterpart from Balochistan, Abdul Malik Baloch, paid no income tax again this year.

The real increase in taxpaying behaviour, however, came among federal cabinet ministers. The federal cabinet in total paid Rs14 million in taxes in 2014, compared to Rs7.4 million in 2013, an increase of 90.6%.

Finance Minister Ishaq Dar paid Rs2.3 million in income tax, compared to Rs824,891 in the previous year. However, last year, Dar had also declared Rs2.7 million in taxes paid by business entities in which he was a shareholder. In 2014, however, he declared zero in that category of income taxes.

Information Minister Pervaiz Rashid paid Rs313,681 in income tax compared to Rs20,959 in 2013. Interior Minister Chaudhry Nisar paid Rs641,228, nearly 11 times as much as the Rs57,124 he paid last year. Commerce Minister Khurram Dastgir who paid just Rs21,111 in the fiscal year 2013 did not file his returns for fiscal year 2014.

Petroleum Minister Shahid Khaqan Abbasi, who owns a controlling stake in Air Blue, paid Rs2.2 million in 2014, nearly twice as much as the Rs1.2 million he paid in 2013.

Water and Power Minister Khwaja Asif paid Rs4.7 million in income tax in 2014, an amount astronomically higher than the Rs58,719 in the previous year. Planning Minister Ahsan Iqbal, who had paid a paltry sum of Rs11,084 in 2013, has contributed Rs130,749 in the latest year. Railways Minister Khawaja Saad Rafique paid Rs2.1 million in income tax, almost doubled what he paid the year before.

National Assembly Speaker Ayaz Sadiq paid Rs327,895 in 2014, more than twice as much as the Rs148,868 he paid in the previous year.

Senator Aitzaz Ahsan paid Rs12.5 million in income tax in 2014 compared Rs8.8 million in the previous year. Senate Chairman Raza Rabbani paid Rs1.1 million in income tax during fiscal 2014, roughly the same that he paid in the previous year in personal and business income taxes. His deputy Maulana Abdul Ghafoor Haideri paid just Rs30,169 in income tax in 2014, though.


Published in The Express Tribune, April 11^th, 2015.