Don’t push me to pay income tax – why would I pay anyway? Do I get anything in return? This is a common argument every Pakistani has while discussing the income tax issue. Frankly speaking, only salaried class pays income tax in full, that is because their tax is deducted at source and they simply do not have any option! Rest of the population is either poor and does not fall in the tax payer’s category or evade taxes using loopholes in the system!
There is no doubt that Pakistan has one of the lowest tax to GDP ratio in the world with only about 17 million people paying income tax. Last year Finance Minister Abdul Hafeez Sheikh accused the elite class of hampering the broadening of tax net. Only yesterday he claimed focus on bringing 700,000 tax evaders into the tax net.
But how about this old saying “leaders must set examples for others!” Contradicting to this, The News reported that Mr Finance Minister’s nomination papers submitted to election commission show a zero tax payment (he was probably unemployed during year ending 2008!). According to the report, his current salary is Rs 594,899 and this year he generously paid an amount of Rs 49,835 of which Rs 23,065 were refunded to him. A total tax income tax of Rs 26,770 was paid by him! I guess this is not an acceptable example, is it?
Even our donors have been telling us to increase our revenue by widening the tax net. Some of us would recall Ms. Clinton’s lecture given in September last year at Brussels when she said that “The most important step that Pakistan can take is to pass meaningful reforms that can expand its tax base. I know how difficult it is, but it is absolutely unacceptable for those with means in Pakistan not to be doing their fair share to help their own people.”
But perhaps Ms. Clinton needs to understand that in any civilized country citizens pay taxes to run government affairs. In return, the government is responsible for providing security, education, healthcare etc. In case of Pakistan, most of our funds are inappropriately used and the trickle down impact is feeble! It is so disturbing to read that Pakistan is in the league of most corrupt countries. Our national assets such as PIA, Pakistan Railways, Pakistan Steel etc are on ventilator for a long time and instead of turning them as profit making entities, government is using these organizations for welfare by providing job opportunities to few chosen ones!
Is it not the responsibility of our government to create an environment where people are encouraged to pay income tax. One must appreciate that the tax net will not increase overnight, but gradually seeing the value of paying income tax, those currently evade, might start paying their liabilities. Moreover, rich and influential people particularly those in politics need to set examples otherwise increasing tax net will remain as a dream!