Life & Style
In December 2021, Pakistan’s tax revenue as a percentage of the GDP was 5.7%. Unless this increases, there is little chance to break from the shackles of the IMF and attain economic sustainability, which is essential for state sovereignty. Mere political rhetoric and slogan mongering cannot achieve sovereignty. There must be political will to impose direct taxes on all sources of income with no waivers for special interest groups that exercise influence over political parties and powerful segments within corridors of power.
Decades before the Ukraine crisis, Europe embarked on a strategy to conserve energy bills by optimising the use of daylight hours and closing shopping centres and malls before sunset. However, in Pakistan, political point scoring has compelled politicians to do the opposite. Punjab Chief Minister’s recent announcement to reverse the energy conservation policy by allowing shops to remain open till late at night and on Sundays is nothing but a political gimmick. In the last two months, these policies helped Pakistan restrict and reduce its oil import bill to meet IMF demands to reduce expenditures and raise revenues. The country should have embarked on essential economic prerequisites to raise revenues by reducing the import bill. Given the economic recession, which is haunting the global economy, this is no time to embark on political gimmickry.
Earlier PML-N withdrew limited direct taxation on retailers just because they were part of their constituency. Why should import restrictions on dog food and luxury items be relaxed? Similarly, Cantonment Boards increased DC rates of real estate by 20% to benefit tax impact on real estate profits and increased property tax on self-owned houses by over 400% to meet targets. It seems economic sanity will always be a casualty of special interest groups.
Malik Tariq Ali
Published in The Express Tribune, August 13th, 2022.
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