The Pakistani economy doesn’t represent anything if not potential. And this is not just talking about potential business opportunities or even the untapped potential of our large human capital base. Even in public finance, a measure of vision, focus and follow-up has remarkable returns. Though many scoffed at the Punjab chief minister’s declaration to eschew foreign aid, a serious set of reforms – ones that the League is not capable of – in just the land revenue system of the province can yield revenues many times over the quantum handed out by the international donors. At the pre-budget seminar organized by this paper the other day, the finance minister revealed that the intelligence set up at the FBR had zeroed in on 700,000 individuals (there would be many, many more) in the top socio-economic bracket, the sort who spend an average of sixty days travelling abroad, that do not yet have a tax number. Shameful? Yes. A goldmine? Most definitely.
At the moment, as the federal revenue secretary pointed out, a total of 55,000 of this group have been served with notices while the rest of the lot will be notified by June 30th. The plan is to, initially, extricate a sum of Rs. 100,000 each, generating, in one quick go, additional revenue of Rs. 70 billion. The idea is to go forward from here and properly document them for purposes of taxation in the future. And this is not to mention the amount to be generated by the penalties these individuals will and should have to pay.
We have one of the lowest tax-to-GDP ratios in the region. The sense of indignation that we, as a people, feel against the revenue apparatus in general borders on the hilarious. True, the tax departments are thoroughly riddled with corruption, but the graft largely exists only to rid individuals of due taxation, not to save them from any possible malicious over taxation by officials. The aforementioned upper middle-class and upper class tax evaders of the country are bound to meet up in the evenings. There, they are bound to discuss politics. And therein, they are bound to run the popular government and the political parties to the ground. The principal charge against the representatives of the teeming millions: corruption.
Chutzpah. All around.
