Pakistan’s tax-GDP ratio is at the same level as Ethiopia and Afghanistan – Shahid Kardar

Tax reform agenda for next government

By Shahid Kardar

Pakistan has one of the lowest tax to GDP ratios and, even considering developing countries alone, it is in the bottom ranked nations in terms of the proportion of population registered as taxpayers – less than 5 percent. of household population. There is rampant tax evasion, partly with the collusion of the official machinery. Whereas 3.1 million people have the National tax Number, a mere 1.2 million filed an income tax return in 2010/11. What is even more startling is that of 47,800 companies that have NTNs, less than 16,800 filed an income tax return against 400,000 industrial electricity connections.

As admitted by FBR, there is a tax gap of 79 percent. (the difference between potential revenues under the existing system and that actually collected). Revenues can be raised through broadening of bases, improving the equity of the tax regime, incentivising documentation, checking evasion by embracing a zero-tolerance policy, checking harassment of, or collusion with, taxpayers by simplifying tax returns and making FBR a faceless bureaucracy, with interaction between taxpayers and tax officials limited through greater reliance on automated computerised systems.

The general tax reforms would include taxation of all incomes of same levels equally irrespective of source, with a swift reversal of the travesty of the recent amnesty granted to trading in shares. There is also need for legislation that will render all Benami Transactions illegal and subjecting all cabinet members, who should all be taxpayers, to detailed tax scrutiny throughout period of office, and they should all be taxpayers. The tax returns and Wealth Statements of all parliamentarians and holders of key public offices and their spouses (including Secretaries, Chief Justices, Chief of Army Staff, Governor State Bank, Auditor and Attorney Generals) should be public during period of office and one year thereafter. Finally, following good results of tax mobilisation initiatives, individual and corporate income tax rates and the GST rate could be lowered under a phased programme.

 

The specific reforms under different tax heads would be the following: For Income Tax: Greater dependence needs to be placed on technology and through that on the CNIC for tracking commercial transactions to identify potential tax evasion/evaders, including movements in bank accounts of large deposit holders. The FBR should periodically reconcile the property tax registers of all provincial governments, names of credit card holders and members of private clubs with those allotted National Tax Numbers, for the system to generate notices to non-filers. All presumptive taxes should be replaced by withholding taxes (which presently contribute 60 percent. of income tax revenues). And the rates of all withholding taxes should be increased by at least two percentage points as a revenue enhancing measure, to incentivise documentation and penalise those trying to avoid capture in the tax net. ….

Read more » The News

FBR confirms 24,000 containers missing from Karachi Port

by Ansar Abbasi

ISLAMABAD: Thousands of Nato, ISAF and US Military containers have reportedly gone missing inside Pakistan during the last four years amid serious fears that many of these may have contained arms and ammunitions, which may have gone to terrorists.

Almost corroborating the grave charges levelled by PPP leader Dr Zulfiqar Mirza that a senior minister of MQM was responsible for these missing containers being in-charge of Ports and Shipping Ministry, sources in the Federal Board of Revenue say in addition to more than 24,000 missing containers of Afghan Transit Trade Commercial side, thousands of the unchecked containers belonging to Nato, ISAF and US Military had left the Karachi Port, but did not cross the Pak-Afghan border during the last four years. The sources, ….

Read more → The News

Pakistan : corruption – huge fraud & corruption in FBR – corruption.

Huge fraud and corruption in Federal Bureau of Revenue ( FBR) throught custom and national logistic departments.

Courtesy: Geo TV (Aaja Kamran Khan Ke Saath, 20 Jan. 2011)

via – ZemTV – You Tube Link

Most of the leaders of third world countries on sale, but Pakistan’s ruling elite is exception & it is very lower level satrap and slave

ANALYSIS: Schamlosigkeit! — Mir Mohammad Ali Talpur

….. Here, our easily purchasable politicians and bureaucrats do not hesitate to barter away their souls and, in Reko Diq’s case, the asking price is not their souls but the easily dispensable rights and future of the Baloch people.

The rights of the Baloch people seem inconsequential to the centre and they flout them with brazenness. Recently, Balochistan Assembly Speaker Mohammad Aslam Bhootani minced no words and exposed the immense pressure being put on them by the Prime Minister’s House to allot 70,000 acres in the environs of Hingol National Park to Arab princes for rest and recreation. He emphasised that the Balochistan government had earlier refused this land to a federal security institution because of the local people’s opposition. The Arab princes would do well to remember that in Balochistan they will not enjoy the tranquillity that Cholistan offers because here the people will definitely resist their unwanted presence.

Sheikh Khalifa bin Zayed Al-Nahyan, president of the UAE, alone has been allotted hunting permits in Zhob, Ormara, Gwadar, Pasni, Panjgur and Washuk districts. Pakistan is a signatory of the UN Bonn Convention on migratory species, which protects the endangered Houbara Bustard. But expecting respect for ‘bird rights’ where ‘human rights’ suffer immeasurably is infantile fantasy.

The Arab royalty have also been granted tax exemptions for all their property and imports for hunting purposes. The Federal Bureau of Revenue (FBR) clarified that “similar exemptions were also given to the United Nations, charitable organisations and diplomats”. The Arab rulers certainly qualify as ‘charitable organisations’ for the rulers and politicians here. They give them asylum and plead their case with the US.

The Pakistani politicians and the establishment are very fragile and vulnerable to pressures as is amply proved by the WikiLeaks or rather the ‘Wikitorrents’ that they have turned into. WikiLeaks certainly threatens to sweep away many a reputation and career around the world except perhaps in Pakistan and the Middle East where phenomenally shameless unashamedness or Schamlosigkeit exists as a unique quality in the rulers and establishments; the worse the reputation, the better are the chances of success.

The respect that the Arab princes and rulers accord to the rulers and politicians here is apparent from the choice epithets used for them in WikiLeaks. Some are considered dirty but not dangerous and others are dangerous but not dirty, and yet these shameless people go grovelling to their liege lords like serfs and subjects.

These rulers and politicians and the establishment sacrifice self-respect for material benefits; they cannot be expected to stand up for the rights of the Baloch people over their resources and land. And, moreover, because the Baloch do not expect them to protect their rights, they will resist Tethyan and the Arab princes’ encroachments on their land and resources in the same way that made, in spite of the huge military presence, Amoco Oil Company give up oil exploration in the Marri area in 1974.

To read full article : Daily Times

The writer has an association with the Baloch rights movement going back to the early 1970s. He can be contacted at mmatalpur@gmail.com