Tag Archives: donors

Pakistan’s economy Plugging leaks, poking holes – Who will pay for Pakistan’s state?

PAKISTAN’S national poet, Muhammad Iqbal, believed the subcontinent’s Muslims needed to unite if they were to prosper. Without a strong sense of nationhood, he wrote, “mountains become straw and are blown away in the wind”.

Poetry and taxes do not often mix. But those melancholy lines grace an analysis of Pakistan’s fiscal plight by Ehtisham Ahmad of the London School of Economics. The country’s tax revenues have collapsed. Its debt is almost certainly unsustainable without outside help. And yet Pakistan does not pull together. “Textile lobbies, the urban gentry, traders and agriculturists, all point to the other and say: Tax that group first, but do not tax me,” Mr Ahmad writes.

The tax authorities can identify a mere 768,000 individuals who paid income tax last year. Even fewer—just 270,000—have paid something in each of the past three years. That is one reason why Pakistan’s tax revenues amounted to only 9.1% of GDP in the latest fiscal year, one of the lowest ratios in the world (see chart). These are exceedingly narrow shoulders on which to rest a nuclear-armed state of 180m people. The culture of cheating starts at the top. Most members of parliament, many of them conspicuously affluent, do not file tax returns.

In the months before an election, due by May, the government of President Asif Zardari of the Pakistan Peoples Party (PPP) is proposing a controversial remedy: an amnesty for evaders. They will be invited to wipe the slate clean with a one-off payment of only 40,000 rupees ($400). The government says it is a quick way to resuscitate the public finances and expand the tax net. Its critics see the amnesty as a boon for politically connected crooks.

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Malik Ishaq and the state

Malik Ishaq is today the symbol of the state’s surrender to terrorists.

The scourge of Pakistan’s Shia community, Malik Ishaq of the banned Lashkar-e-Jhangvi (LeJ) — an offshoot of  ‘renamed’ Sipah-e-Sahaba Pakistan (SSP), which is in a legal penumbra of state ban — has been arrested upon his return from Saudi Arabia, where he could have gone to perform a religious ritual but could also have touched base there with the ‘donors’ who finance the massacre of the Shia in Pakistan. The charges against him of hate speech followed by sectarian killings are quite serious. He was acquitted of the same category last year and let out of jail after remaining there for 14 years.

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‘Stable Afghanistan not worth abandoning strategic interests’

By Shahbaz Rana

Excerp:

…. The German cabinet member appeared reluctant to commit to additional assistance for security. “We know that for our work we need a secure environment but we cannot make payments as much as you require,” he said. …

…. The German minister urged Pakistan to implement tax reforms. “For us as donors, a strong, big and proud country must do more than have revenues from only 1.5 million people out of a 180 million population as it is important for us to explain our taxpayers,” he added.

To read complete article: The Express Tribune

Sindh’s discomfort with surging foreign debts

By Sabihuddin Ghausi

Mounting foreign loan burden has started telling on the nerves of Sindh’s economic managers. Officials at the Sindh Secretariat at Karachi complain of inflated cost of foreign funded projects that are thrust on them. “ All projects are virtually designed by the donors but are attributed to us without the consent of provincial political leadership and the concerned officials,” confided an official.

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