Pakistan: Cricketers not paying tax

EDITORIAL

Tax evasion is one of the most commonly use practice is Pakistan where the taxation system itself is overwhelmed with anomalies if all sorts, the most glaring of them being not charging the powerful elite, predominantly the landed aristocracy, with tax encumbrance. In the past men and women associated with cinema in Pakistan, more prominently top actors and actresses, not paying their taxes used to attract the mind of the common person. Now that the film industry has collapsed, the focus has shifted the top cricketers not fulfilling their national obligation, is the focus of attention. Recent media reports suggest that the income tax department has issued notices 21 top cricketers who were found to have evaded taxes of more than Rs100 million over the past two years. This is the first time that the Federal Board of Revenue has issued notices to cricket celebrities who will be grilled about tax liabilities. The investigation department has already compiled the tax profiles of these cricketers on the basis of information collected by the income tax intelligence directorate of the FBR. The Regional Tax Office (RTO), Lahore, had issued notices to Umer Akmal, Misbahul Haq, Kamran Akmal, Abdul Razzaq, Mohammad Hafeez, Azhar Ali, Imran Farhat, Rana Naveedul Hasan, Saeed Ajmal, Taufiq Umar and Wahab Riaz. RTO Karachi issued notices to Shahid Afridi, Younus Khan, Abdul Rahman, Asad Shafiq and Tanvir Ahmad; RTO Sialkot to former captain Shoaib Malik, RTO Peshawar to Umar Gul and RTO Rawalpindi has finalized notices to be served on Shoaib Akhtar, Sohail Tanveer and Yassir Arafat. Umar Akmal alone owes to the national exchequer Rs7.5 million, the highest among his colleagues because he is the busiest cricketer at present with a number of international engagements.May they be cricketers or people from other walks of life, the FBR's revenue collecting machinery has always shown flexibility over and above the law and consequently bing unable to meet targets stipulated at the beginning of every fiscal year. Every time it sets targets that are ambitious rather than being objective and in the end it has to lower them to demonstrate that it has achieved revenue collection targets. The very recent example is the shortfall of nearly Rs 66 billion during the first four months (July-October) 2012-13. So far, the FBR has not revised downward the ambitious revenue collection target of Rs 2,381 billion for the current fiscal. However, there seems a little improvement for the month of October when the FBR provisionally collected Rs 138 billion against Rs 126 billion in the corresponding period of last fiscal, reflecting an increase of Rs 12 billion.Some other FBR targets can also materialize to portray a rosy picture of revenue collection in Pakistan for the fiscal year 2012-13. For example, Islamabad is highly more or less sure of receiving $680 million from the United States on account of coalition support prgramme. The country's economic manager also hope to realize around $800 million upon the auction of the third generation telecom licences. But this proposition, which remained unfulfilled even last year, seems difficult to be realized this year also because the team working on this has not so far been able to appoint a consultant despite the lapse of five months. Almost similar is the status of the FBR's tax amnesty scheme that proposes whitening the black money amounting to around Rs170 billion, because the FBR has not so far whetted it with a cover of a legal regime. Thus the has not yet been submitted to the government.Pakistan's economic survival lies in collecting taxes wherever due by abandoning the policy of appeasement towards the powerful and the rich, spending the funds prudently by right-sizing gigantic government machinery, benefits of civil servants and public office holders, investing in long-term productive projects, and catering for basic needs of the citizens. An unshakable determination, consistency in policies and political will are required to curb the years-old habit of defying tax laws with the purge in tax machinery and spending tax money for the welfare of the entire population and not merely a handful of people.