Fewer than a third of the country’s parliamentarians file annual tax returns, according to a report published on Wednesday, lending new focus to longstanding complaints from foreign donors and ordinary Pakistanis about tax evasion at the highest levels of society.
The report, which was jointly published by two civil society organisations, found that just 126 of the country’s 446 members of the National Assembly filed annual income tax returns in 2011. The report does not take into account the tax paid by politicians on their parliamentary salaries, which is automatically deducted by the government. Instead, it focuses on the lawmakers’ declarations of supplemental income from property, professional practices and other sources of revenue. Nevertheless, in a country where many politicians enjoy lifestyles that far exceed their official salaries, the report raises fresh questions about the dedication of top lawmakers to enforcing the tax laws they are supposed to oversee.
“Tax evasion has become a social norm in our country,” said Umar Cheema, an investigative journalist who compiled the report for the Center for Peace and Development Initiatives and the Center for Investigative Reporting in Pakistan. “People don’t consider it a crime. But this tax demand established a bond between the people and the state. That’s how you become a stakeholder in society.” Pakistan has a chronically low rate of income tax collection. Of the country’s 180 million people, only two percent are registered to pay tax, and fewer than a quarter of those actually do so according to the report.
