Battersea Park fun fair in the early ’60s was an absolute must for all ages. It was the pre-electronic entertainment time, when Ferris wheels, thunderous slopes and big-dippers ruled the roost and all roads led to Battersea. My big thing was ‘Dodge ’Em’ cars. You could either be a wimp and slide around the periphery not getting thumped or go right into the middle and feel every big hit jar your spine. There were no PVC extrusions then and everything was made in metal so the sounds and impact were totally different to those at fun fairs today.
My mind rushed back to this because the word “dodge” came to mind in the context of tax evasion that is rampant in this country. I’ve been away a week and on return was happy to note that the contents of my last article seemed to have prevailed to some extent. The Finance Bill has been passed without succumbing to the intensive lobbying that demanded removal of certain provisions. Once again, congratulations to all who agreed that the interests of the state must prevail over those of pressure groups.
Hearsay has it that 20,000 of those issued tax notices have responded to them with the infamous “NIL” return. Really interesting! Of course, there must be genuine ones amongst these submissions. That itself starts another new story. Anyways, this was to be expected in an environment where patronage not only allows dodging but also proactively supports it. Revenue collection has never been promoted sincerely in Pakistan. Reforms have not succeeded despite dozens of attempts and proposals funded by the World Bank and other international institutions.
‘White Collar’ crimes have been the order of the day since times immemorial. They leave no receipts and traces evident to standard investigations within the law in our country. Invasive investigations draw the ire of patronage or lead to lawsuits. Stay orders are easily obtained and sustained although the principle demands that government revenue matters be exempted from such relief. Eventually, it all drags on and the file disappears.
Don’t for a moment think it can’t be controlled. The world has, so can we. What it requires is serious political and administrative will. In certain cases, all it requires is honest investigation. Someone of substance declares he doesn’t have a vehicle! Ok! But he does get around, right? The car he uses does belong to someone and has apparently been paid for, right? Six cars, at least, in the forecourt! The money came from somewhere; let’s track it. It is shameful. Detection is not enforced because the system and environment provides for “protection”.
Governments have set up multiple institutions allegedly to control fraud. At times, these have been staffed from the military to ensure enhanced honesty. After a genuine start, these institutions lapsed into becoming tools for political harassment and billions of tax-payer funds were wasted on hundreds of mostly frivolous cases, at least as far as the results reveal. Only a handful ever reached conclusion.
To be perfectly fair, those already taxed must not be further burdened. Harassing them leads to creation of devious modalities leading to eventual ‘evasion’ of sorts. It also discourages potential taxpayers from registrations to avoid appearing on the radar screen, as we recently know from the response to the RGST. But those paying meager amounts in proportion to their ‘income’ and engaging the assistance of accountants and advisors to abet evasion must be thoroughly investigated. Not just them but those aiding and abetting as well.
So how does one go about it? Let’s quickly agree its not going to happen in a day. A complete overhaul is required. Demolishing this system hurriedly and setting up another equally hastily is not the answer. Forensic science has taken on a whole new meaning in respect of maximisation of revenue collection and its high time Pakistan deployed this given the horrific tax-to-income ratio. Britain’s Serious Fraud Office is a prime example of institution and expertise that needs to be harnessed. The creation of “Untouchables” to beat “The Untouchables”.
For this institution to be successful there are three essential requirements, all very doable. Forensic scientists with experience need to be recruited. Many Pakistanis work overseas in this field; we need to source them and pay them, perhaps even more than they are earning currently. And if we can’t find enough of expats, we hire the services of foreigners for their technical expertise. Of course, this needs investment. Where maximisation of revenues justifies expenditure, access to funds should not be lacking either from within national resources or from international lenders.
Powers are of the utmost importance: powers for investigation and prosecution. The supremacy of this institution is of prime importance. Hence, it must derive its powers from the parliament as a statutory institution. This perhaps is the most difficult aspect of this theory. The patronage for ‘The Untouchables’ is provided from this very source and, as I said at the very outset, political and administrative will is the only way this issue will be resolved.
They must then decide whether they or Pakistan must come first. I know what the people want. Aren’t they supreme?
The writer can be contacted at [email protected]
