Session 15: The
flawed tax system of Pakistan
A country is run through funding from many internal and external
sources like taxes, exports and international funding etc. one of the main ways
through which the government makes money internally is through taxing. Every government
imposes taxes on all the goods and services provided and the money collected is added to revenue of the country.
In Pakistan this crucial form of funding state budget is highly flawed, as a large number of people in the country do not pay taxes. Many elites of the society consider themselves exempted from the duty of taxes, landlords who also sit in the senate make policies regarding which benefit them, many businessmen takes out their money from the banks the day before taxing is imposed and many use other ways to avoid it. the poor of the society who pay taxes in using everyday items and services are getting poorer and avoid taxes in any way possible. These people also condemn government for increasing taxes and the tension keeps increasing. The need of the hour is to introduce effective taxing policy which is fair to rich and poor equally. The elites of the society are made to expose their true belongings and should be taxed on it so the revenues of the country can increase and t can come out of the heap of foreign loans.
In Pakistan this crucial form of funding state budget is highly flawed, as a large number of people in the country do not pay taxes. Many elites of the society consider themselves exempted from the duty of taxes, landlords who also sit in the senate make policies regarding which benefit them, many businessmen takes out their money from the banks the day before taxing is imposed and many use other ways to avoid it. the poor of the society who pay taxes in using everyday items and services are getting poorer and avoid taxes in any way possible. These people also condemn government for increasing taxes and the tension keeps increasing. The need of the hour is to introduce effective taxing policy which is fair to rich and poor equally. The elites of the society are made to expose their true belongings and should be taxed on it so the revenues of the country can increase and t can come out of the heap of foreign loans.
2 comments:
International funding ideally should not be a source of government revenue. If the state is doing an appropriate job of managing the imposition and collection of revenue, the government should not require assistance from IMF or the help of other bilateral aid agreements that take a toll on the country's independent decision-making and course-determination abilities and weigh down on the ethos they are able to carry at international forums.
The sad reality in Pakistan is that the poor are equally corrupt in matters of taxation as the rich, a parallel similar to the depressing state of our moral affairs across socio economic groups.
This discussion on taxation also sparked an interesting recollection related to one of the topics some of us wrote our midterm paper on: the difference between the state and the government and the valence of their priority. One way that the state was seriously weakened and damaged by the actions of the government was through the 18th Amendment. The federal government was obligated to transfer 65% of its tax revenue to the provinces in the name of devolution and delegation, hence bankrupting the center and allocating resources to provinces where they were misused because of a lack of integrity and competence at the level of provincial institutions.
This again ties in with an economic explanation of politics. The only difference being that in our country, the economics that is given highest priority by our leaders is their own assets, not that of the collective country.
Great comment and I concur. Without an effective taxation system, the Pakistani state will continue to wither from its own inability to tax and spend. Our sclerotic governments continue to focus on their own enrichment, which ultimately hurts the development of our nation.
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