Federal Board of Revenue Chairman did not say anything out of the ordinary when he noted how a staggering 15 million remained outside the tax net despite high income. International organisations have repeatedly called on Pakistan to focus on sectors like real estate, agriculture and those employing shortcuts to evade paying taxes. The slightest speculation about any reforms in this regard prompts an uproar among the big shots. A few months back, just one round of a news item on social media was enough for former finance minister Ishaq Dar to clear the air as he stood before a dense parliament and “categorically” clarified, “No more taxes!”
Tiptoeing around the elephant in the room cannot do anymore. Pakistan’s tax-to-GDP ratio stands among the lowest in the region despite the state employing every trick in the playbook to attract tax filers. But as the IMF insists on new measures to fill the gaping holes, it is becoming increasingly difficult for the revenue board to even collect the measly targets. Diminished tax collection, especially in the last few years, has been forcing governments to accumulate massive public debt, which in turn leads the path towards domestic and foreign lenders.
The next government would have to realise that its slap-on-the-wrist approach with regard to parking lots for dirty money has only managed to worsen its financial constraints. Whatsoever happened to long-drawn-out lists compiled on those who failed to disclose their assets and pay what they owe the state in stark contrast to their lavish lifestyles, palatial residences and long queues of luxury vehicles?
The fanfare attached to naming and shaming the culprits might have earned them a few golden stars then but mere optics cannot cancel out bad policies. Instead of relying on tested-and-failed quick fixes like sky-touching indirect taxes and new taxes on the salaried class, it would be worthwhile for Islamabad to dig deeper and come up with a concrete policy. *
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