Pakistan: Tax evading MPs

THE FRONTIER POST

Tax evasion has so been deeply rooted in Pakistani society as to become a culture permeated in all sections of the population and lawmakers are no exception. A report carried by all newspapers of the country on Thursday portrays a ham-fisted picture of MPs hailing from all political organizations without exception saying that more or less 70 per cent of them do not pay taxes and they include top leadership like the head of the state, prime ministers, governors, chief ministers and federal and provincial ministers. The report also suggests that members of the National Assembly and the Senate alone own an average net wealth of around $882,000 and yet they do not pay due taxes. What is ironic that legislator are rolling in wealth while Pakistan has one of the lowest tax-to-GDP ratios in the world, estimated at 9.2 per cent. It also found that 78 MNAs and senators are still not registered with a national tax number. In all, only 260,000 out of 180 million citizens, around two per cent, have paid tax consecutively for the last three years. It may be pertinent to note that Pakistan's refusal to implement sweeping tax reform was instrumental in the collapse of a $11.3 billion IMF bailout programme in November 2010. Also a fact is the country is one of the biggest recipients of Western aid - payouts that US Secretary of State Hillary Clinton and British Prime Minister David Cameron have said are difficult to increase when Pakistan's own elite pays no tax. The anomalous, rather unlawful, picture that has emerged once again points out to injudicious and unjust taxation system and tax laws that deducts the petty salary of a clerk at source but does dare touch the elitist who keeps on playing fraud with the public exchequer for years and decades and yet is not proceeded against. The report comes after the chairman of the FBR, Ali Arshad Hakeem, offered Pakistani tax evaders the chance to pay around $420 to have their slates wiped clean in return for committing to pay tax regularly from next year. The wealth that has concentrated in a few hand has the potential of fetching much more than Rs one trillion in tax a year. However, tax collection has even not covered the budget deficit that has kept on mounting. The problem is not limited to lawmakers, it is that of the entire prosperous class of Pakistan. Their lifestyles totally betray their declared income. Another difficulty is that even when breaches of the tax laws are discovered, the rich and politically connected are rarely prosecuted and this manifests how weak is governance in the context of overall enforcement of law in Pakistan.