Stop reinventing the wheel

Who doesn't know that most of revenue share of state escapes through what has now become 3-cornered game of siphoning


M Ziauddin July 07, 2015
The writer served as Executive Editor of The Express Tribune from 2009 to 2014

Who does not know what is wrong with Pakistan’s economy. Almost every student of Pakistan’s economy has diagnosed the ailment umpteen times and even suggested a number of cures. The Planning Commission is full of erudite and pedantic papers on the subject, prepared by successive governments, both political and military. A number of five-year and 10-year plans and long-term and short-term economic visions are gathering dust in files in almost all government departments and ministries. We have reinvented the wheel so many times that now no new plan or vision sounds or looks fresh. Most smell too stale to merit even a look.

Who does not know that we have continued to suffer from resource constraints since the very inception of this country. And who does not know how to get rid of this chronic ailment. Who does not know that unless we do something about it we would continue to increase our dependence on foreign ‘dole’ that comes attached with political strings and is, more often than not, required to be paid back with interest. And who does not know that for some years now we have been contracting new loans to pay back the interest on the past loans with the principal amount continuing to mount.

Who does not know that we have done nothing so far to increase our tax-to-GDP ratio to a level that would enable the country to get rid of our chronic dole dependence. Who does not know that there are more than 850,000 income taxpayers in this country of almost 200 million people. And who does not know that most of these income taxpayers belong to the salaried classes and that most of the rich indulge in massive tax evasion and avoidance in collusion with the tax collectors. Who does not know that most of the revenue share of the state escapes through what has now become a three-cornered game of siphoning that the law-makers, the richer classes and the Federal Bureau of Revenue (FBR) staff have been playing with total impunity all these 68 years.

Who does not know that the FBR is corrupt to the core with exceptions proving the rule. Just visit the FBR website and you would know the great cover-up job it has been doing for ages. The website does not provide any useful data, month-wise or even year-wise, regarding registered assessees, returns filed, tax paid assessees, revenue collection, direct/indirect ratio, refunds held up, advance tax collected from large corporations through coercive measures (which can only be described as temporary loans to the government and must carry interest if not refunded within the statutory time limit); also, there is no mention on the website of advance cheques for repayment issued for July. And of course, who does not know that failing to collect the targeted amount, the FBR in the final months of the year orders arbitrary assessments with instructions to appellate officers not to give relief even where justified. And there is no information on the FBR website about this kind of collection either.

Who does not know that we have failed to enlarge our list of exportable surpluses since perhaps the 1970s, and now are losing the market for even these items because of our economically insane policy of keeping the rupee pegged to an over-valued exchange rate, thus subsidising imports, rendering exportable surpluses costlier in the world markets and expanding the trade gap in the process, so much so that we are forced to go to the lender of the last resort every now and then. And now the situation has deteriorated to such an extent that despite being the fifth-largest producer of cotton, Pakistan’s textile exports are taking a drubbing from even Bangladesh — which does not produce any cotton. The All-Pakistan Textile Mills Association, a club of Pakistan’s richest tycoons, has threatened a lock-out because its members find it impossible to part with a portion (in the shape of new taxes) of their unearned billions that they had made in the past to rescue a government, made up of their own kind of tycoons, from what looks like an imminent fiscal jam.

Published in The Express Tribune, July 8th,  2015.

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COMMENTS (4)

Uzair | 6 years ago | Reply Simplistic arguments by the author. The problem is more about distributive policies rather than resource constraints. The fundamental problem is that we are obsessed with macroeconomic indicators (e.g, GDP, foreign reserves) and not concerned about the distribution of resources. It's about time that we look into Gini coefficient for wealth, access to health, education, etc. What good are the foreign reserves if they do no translate in decreasing poverty and inequalities?
saleem | 6 years ago | Reply The problem are the corrupt media owners who have a deal with the corrupt politicians in power.
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