How to reduce tax burden on people; austerity by rulers can be a way-out


Salahuddin Haider

PAKISTANIS, groaning under unbearable tax burdens since long, have the right to demand a simpler, easier budget coming June. How to achieve that objective is the primary, and perhaps the most crucial question. Rulers, parliamentarians, and all those moving in power corridor can set an example by cutting down on their ostentatious and lavish living and be role models for others to emulate.
Even a cursory glance at the practices pursued till date, can convince even the ordinary student of economics that our country is now the most heavily-taxed State, after Israel. The disparity between income and expenditure is far too huge than is being, or has been, visualized.
Policy framers would argue that inflation has come down substantially under the new regime of PML(N), mark up rate has been brought down from 10.5 to 6 per cent in the last three years, petrol prices have been lowered from Rs108 per litre to below Rs70 now, and that prices, too have been showing downward trends.
True, and unhesitatingly accepted, yet the question remains that poverty alleviation programme has remained ineffective till date. Poorer or the lower income groups are still finding it hard to make their two ends meet. Quite a vast number of such segments are still unable to have two square meals a day.
In America or Europe, manufacturing sectors from auto industry to ordinary toys, are priced within reach of the consumers’ six weeks of wages. Installment system for buying cars or many other necessities of daily life for a family is in vogue for years. Life is much easier there and the standard of living much higher than can ever be imagined here. This is a bitter, hard, naked reality, and can easily be verified even on internet, now a household name in Pakistan also.
The other and most important instance can be of harsher checks, applied to emoluments, allowances, perks, and privileges for ruling classes, whether of royalty, elected heads of States, prime ministers, ministers and parliamentarians, or all those, categorized as VIPs.
For example, Sweden is the role model for checks of such kinds. The prime minister there is not allowed even a driver, has to drive his own car, is not entitled to servants at State expense, and even the late Olaf Palme, Swedish prime minister, killed while cycling home from a movie at night, had to cook breakfast for his school-going children and was late in reaching airport to receive the then Pakistan prime minister Z. A. Bhutto during his stopover at Stockholm airport in icy winter season of February in the 70s. Palme apologized to his guest for being late in reaching the airport, as he was cooking breakfast for his children in the absence from home of his wife, out in the early in the morning for consultation with doctor.
Iranian President Ahmadinejad slept over floors, did not have any official residence, neither was his personal house furnished at State expense. Even today top Iranian leadership follows simple living.
In Switzerland, a tiny but wealthiest country of the world with a per capita income of over 6000 dollars, and a population of mere 8 million, believes in decentralization. It is divided in 26 cantons, and has a cabinet of just seven ministers, drawn both from ruling and opposition parties. They, through consensus among them, rotate each one for Presidential post for a settled term of office. That is rare but is also a fact for others to follow.
The British prime minister does not have a big caravan, or fleet of cars. He stops at the traffic signals. Former Pakistan Prime Minister, Yousuf Raza Gilani is a witness to that, because he too along with the then British premier, had to stop at traffic sign on the road, in thick London traffic.
Even Queen Juliana, of Netherlands, and several other smaller states, where Royalty is still retained as symbolic gesture, are often found cycling on roads, no extravagant expenditure, or allowances are permissible than what is absolutely essential, or unavoidable.
Against that, Pakistan, a poor country, with an extremely low per capita income, has ostentatious life style for its rulers, moving in a caravan of 50 to 60 cars, security and police vehicles. Non-officials like Asif Zardari, Faryal Talpur, and even a young, unmarried Bilawal with no liability, are given lavish protocol—all in the name of security. True, terrorism is a menace and threat perception in our country is too serious to be dismissed lightly, but tax payers’ interest, also need to be safeguarded as bounden duty of the State.
Police and paramilitary rangers force in Pakistan are deployed in rather huge number at the houses and during escort duty for officials and non-officials. Their wages, allowances for duty, and fuel costs for vehicles, are met from government exchequer, which the poor citizen has to pay through his nose. Zardari, Faryal and Bilawal, or for that matter, many of our parliamentarians, have tons of money, and can afford their own private security. Why waste government money on them?
Likewise, parliamentarians, whether senators, national or provincial assembly members, are given unnecessarily large number of police or rangers personnel and vehicles.
Then parliamentarians, at federal or provincial levels, keep hankering for greater emoluments, caring little that as public representatives, and chosen by the people through ballots, are interested more in serving their own aggrandizements, rather than realizing their obligations for their voters, before who they keep begging during elections. Everything is forgotten so very conveniently once the electoral processes are complete.
Unfortunately, presidents, prime ministers, ministers, have lavish life styles, most of them have fabulous bank accounts, are filthy rich (as they normally say in English language) and yet prefer to travel abroad at tax-payers costs, even for personal reasons.

Treatments in foreign countries are undertaken at public exchequer cost.
I still recall that almost every TV channel, including the official BBC, blared stories after stories on their news and commentary bulletins that the then Prime Minister Margaret Thatcher in 1981 went to a private clinic and had to pay 100 pounds sterling as doctor’s consultation fee. The media kept asking the question as to what will happen to the British national health scheme, if an office holder like the prime minister, would prefer to consult private doctors.
Can such queries be allowed in our country, called Pakistan (the land of the pure), inhabited by the poor, and hardly able to take care of the needy segments of the society.
Time has come for the finance ministry, and federal board of revenue (FBR) to review its policies, and cut down on all lavish expenditures on President’s and prime minister’s houses, and their huge staff, pay and perks etc.
The former Singapore Prime Minister Lee Kuwan Yu, used to travel for officials summits on commercial liners, and with a maximum personal staff of mere 6 to 8 persons. Can we follow that tradition? Yes we can, but it becomes the question of belling the cat. Even late President Ayub Khan often travelled on commercial flights of PIA for foreign tours .We proudly announce to the world of mammoth delegations, wives, family members, and journalists teams during official visits at State expense.
Naturally, the finance ministry finds it difficult to balance the budget and resorts to taxes, ignoring the dire needs of vital social sectors, comprising health, hygiene and education. Take a look at the past history, and find out as to how many new universities or hospitals we opened for the needy during last many years.
In Pakistan, it could easily be argued that taxes are at the lowest levels compared to many countries, but can those responsible for framing the budgetary policies, explain as to how much a common man in returning to government in the form of indirect taxes? He or she can hardly save even 5 per cent of a 100-paisa rupee for children education, or for meeting domestic needs.
There are taxes, and surcharges on petrol, electricity bills, and under numerous heads of accounts. Why because we believe in ostentatious living, and care little about the poorer sections, forming the vast majority of the country’s population.

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