Taxing rich


PRIME Minister Shehbaz Sharif Thursday said that the tax regime for affluent sections of the society was being revised and a genuine tax would be imposed on total income of such persons for the first time in the country’s history.

Addressing the Pakistan Muslim League (Nawaz) (PML-N) Senators in Islamabad, he said the tax collected from the affluent would be spent for welfare of working and poor classes of society, who were the real builders of Pakistan and who had always sacrificed for the country.

He termed it a political and religious obligation of the rich to accommodate the deserving people and contribute for the prosperity of the nation.

There is definitely need to broaden the tax net and increase revenue collection substantially as this is the only way to get rid of costly and humiliating dependence on external loans that are assuming dangerous dimensions and the country might not find it possible to repay its debt at some point of time in future if corrective measures were not taken now.

It is because of our economic and financial vulnerabilities that we have fallen badly in the trap of the International Monetary Fund (IMF) and are forced to accept terms and conditions that add to the miseries of the people without contributing anything worthwhile towards improvement of the economy.

It is, however, also a fact that our tax-to-GDP ratio is one of the lowest in the world and genuine measures will have to be taken to expand the tax collection.

As in the past, the present Government too is declaring, day in and day out, that it wants to tax the affluent and promote the welfare of the downtrodden segments of the society.

No one knows what would be the final shape of the plan to tax the rich to fund plans and programmes for relief and welfare of the poor but we have seen in the past that all such claims turned out to be mere slogans as powerful lobbies and well-connected people avoided paying their due taxes and the burden was then added to the common man in the shape of increasing prices and taxes on POL products, revising electricity and gas tariffs upward and hiking the existing taxes.

The real issue between the Government and the IMF is how to increase revenue collection and in case the Government comes out with a definite and workable plan to make the rich to contribute their due share to the national kitty, the IMF will have no objection to the grant of subsidies to protect the common man against back-breaking inflation.

There are reasons to believe that the Government will not need to put more burden on the common man if the business community, industrialists and professionals pay their taxes honestly either willingly or due to strict enforcement of the laws.

We have been emphasizing in these columns that industrialists, businessmen and service providers are the real beneficiaries of the wave of inflation as they instantly hike prices of their goods and rates of their services disproportionately every time when the Government increases prices of POL products or utility tariffs.

They are minting money but regrettably are not ready to pay due taxes and a majority of them are not even filers or pay much less tax than a clerk.

This situation is unacceptable and cannot continue for long and tax evaders and dodgers should be the focus of tax collection efforts.

The Prime Minister has declared that the coalition government was unanimous and focused on the fact that it would complete its constitutional term and the next 14 months would be used for reformation and improvement of the country.

This is understandable but his warning that the country could face more difficult times ahead due to the inherited inefficiency of the last regime does not augur well for inflation-ridden people.

Leaving aside what forced the Government to do so, the fact remains it added an unbearable burden on the people by increasing prices of POL products massively, which triggered a fresh wave of inflation.

It would be unfair and unjust to put more burden on people and that too at a time when people expect relief from the government as the relief measures so far announced are mere peanuts.

Devise firm plans to tax those who have the capacity to pay and spare the common man.

It is also time for the national leadership and all stakeholders to sit together to mull over strategy to lessen dependence on foreign aid and help the country stand on its own feet.

No doubt, the government has decided to impose additional taxes on the rich and on some industries but token taxes on some sections would not solve problems of the country and, therefore, a broader approach should be adopted to bring the entire business community under the tax net.


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