Last week’s tête-à-tête with the singular infamous client was surely enlightening, even if a bit distressing. At least the prevalent dogmas about corruption, defence spending and debt were showcased in a different light. Those who have just joined the interview are advised to refer to last week’s article (Daily Times, April 29 2013), “When we are in power what will we do.” Perchance it might be productive to continue with the inquest on certain other proposals floating in the air, which on the face of it appear to be the need of the hour. The haunting laughter erupting from the dark side on the proposal to tax the rich was indeed confusing. Except that strategically it would be suicidal to continue on a stereotyped format, hence the spanner to throw the interviewee off the track. Load shedding will be history within three years. Inexplicable silence is not what the devil’s advocate expected from the client, hence the statement is repeated. Load shedding will be history in three years; and the silence persists. Wasn’t that directed to the gullible voters? An honest mistake is the retort on a negative nod. That is but an election slogan or more aptly rhetoric. If power had ever been a priority for any government, load shedding would not have prevailed or rather worsened over the last 8-10 years. And assuming, even beyond fantasy, that successive governments were indeed struggling for a solution, the abject failure should evidence the absence of any solution whatsoever. Power shortages are the future, so why waste precious time on this debate. This slogan will be there even in the next election. The rebuttal is immediate and passionate: the dawn of a democratic era might have been confronted with teething problems but now with the development of institutions such as an honest, committed and competent media, the system will surely ensure decisions in the best interests of the populace. The forebearer of everything evil apparently has a jolly side. Since the outcome will be a big fat nothing, let’s be a bit magnanimous and honestly address the quandary. As voters identify a singular party that has openly positioned itself in support of big dams, apparently, avoiding political suicide is the first compromise, change or no change. Even beyond the dams, where is a clear cut strategy on one of the largest deposits of coal in the world? Thar coal, the 6th largest coal reserves in the world, was discovered in 1991 and successive governments continue to procrastinate on its utilisation. Listening to the conflicting proposals, it would probably take another decade before a single unit of energy is generated from that field. Generating electricity is not rocket science, except unless domestic resources are fully mobilised, it is indeed as expensive Whatever the cost, without power all claims of an economic rebound are hogwash. Strategies might not be explicitly publicised, to avoid copycats, but the leaderships of all leading parties are aware of the importance of power. Admittedly in the short term, expensive options are a given, however, over the long term, the nation’s resources will be productively employed to reduce the burden. The short term in this case is never. Recall the rental power plants; and the long term is forever never. Hypothetically speaking, even if another short term option was implemented, where will the money come from for the Capex (capital expenditure) and the Opex (operating expenditure)? With the existing mindset that cheap power is a constitutional right, and empty coffers, power will remain a pipe dream. Cost of power has to be recovered from the end users; it cannot be a burden on those who don’t even see a light bulb, through indirect taxation. In fact, quite the opposite, the tariff needs to be progressive in order to provide targeted subsidies to the poor with the rich ultimately assuming the remaining burden in entirety; again this is not rocket science, the leadership just needs the courage and the will to resist the lobbyists! The above conclusion might be appropriate considering recent history. However, things are changing. There is a resolve to tax the rich, which will provide the funds needed for power generation and distribution. How very true, and supposedly the additional funds will also pay for the bullet train! A strategy to develop infrastructure even at the cost of a deficit is considered farsighted. Understandably, it might be impractical to envisage that investments will be forthcoming for such large scale development, given the existing quantum of national debt, however, that is why raising tax-to-GDP ratio has been identified as a critical strategy. There is hardly any space for increasing Pakistan’s current deficit and even if that is ignored, existence of investors foolish enough to provide additional debt when it is already at unsustainable levels is just folklore. Notwithstanding the preceding, increasing the tax rates and squeezing the rich for development funds is an appropriate strategy. Conservative America, when it espouses a reduced role of the government is talking through its hat; after all, those who couldn’t manage their mortgages shouldn’t be imitated. Once corruption is tackled it would be more appropriate if the government directly manages development projects rather than leaving surplus funds in the hands of the private sector. Government servants are more qualified than the so-called professionals. More money with government means prosperity! While there might be a move from direct to indirect taxation in the UK, even today direct taxation collection is broadly proportionate to indirect taxes, contrary to Pakistan. The view that higher rates of direct taxes are a disincentive for work is another cockamamie argument, most likely popularised by the rich. Trickle down economics, the theory that when the rich get richer, it would necessarily result in further investment and employment for the poor, has already been relegated to the archives. The best policy is to have a progressively high rate of tax, so much so that everyone is brought to the same level of earnings, there is no income inequality. But how can a nation of poor people ever dream of joining the prestigious club of developed nations? Well it doesn’t appear as if Pakistan ever wanted to be called a developed nation, but still this way the government will have a surplus budget to pay its debt and efficiently develop and operate large scale infrastructure projects and industries. And don’t forget corruption would already be taken care off. But does that suggestion not reek of communism? And while taxing everyone, don’t forget to include agriculturists. After all, compared with the rest of the world food prices are still very competitive in Pakistan, which is an aberration. If everything is more or less priced at international levels, why should food be an exception? Imagine the taxmen’s glee, given a situation to improve collection without efficient implementation. And while the government is at it, the wheat subsidy will need to be discontinued. It would be lunacy to first provide a subsidy and than tax it. Don’t forget if the poor farmer’s revolt or stop producing wheat, it can always be imported cheaply from abroad; there is no such thing as food security in the modern world. Finally, don’t worry about costs. Having taxed everything that moves or not, there will be enough to money to take care of the import bill; on the other hand, even if there isn’t, the government can always print more! Perhaps next week can be an attempt to find some sense in all of the above. Meanwhile, let’s hope everyone that matters has a better understanding of affairs. The writer is a chartered accountant based in Islamabad. He can be reached at syed.bakhtiyarkazmi@gmail.comand on twitter @leaccountant