No quick fixes
The government needs additional funds to meet its irrational expenses besides fulfilling the army’s requirements in the conduct of Zarb-e-Azb and rehabilitating the IDP. The required funds can be made available only if the government manages to raise more taxes. As things stand its 10-month performance in meeting the revenue goalposts has turned out to be unsatisfactory. The FBR has fallen short of the already downward-revised tax collection target by Rs100b. The government blames the FBR for the failure. The tax collectors maintain the government lacks the determination to make major tax evaders cough up government dues. There is a perception that the PML-N leadership has traditionally been soft on the defaulting trading community
The axe falls on the common man. Last fiscal year the government slapped roughly Rs50 billion new taxes through three ‘mini-budgets’ which affected all households, irrespective of income levels, because the taxes were levied on essential items like fuel. The taxes were imposed without parliament’s consent and were aimed at achieving the already lowered revenue collection target of Rs2,691 billion. Whenever there is a shortfall of tax revenue, it leads to cuts in the development budget which again hits the common people. The measures taken by the government sometime lead to complaints from the business community itself. The FBR’s Rs1.975 trillion tax collection includes Rs220 billion refunds that it has withheld to inflate its revenues. These include Rs120 billion on account of sales tax refunds. Due to the blocking of refunds, the textile sector has faced severe working capital requirement issues.
Quick fixes like taxing the remittances will force the expatriates to look for alternate ways to send money back home. Attempts to revitalise the FBR officials by inviting Maulana Tariq Jameel to deliver motivational sermons will not help either. Nor will exhortations to the business community by the finance minister be of any use. What is required is political will to expand the tax net without discrimination. Dealing with tax evaders with kid gloves will not produce required results.
