If tax evasion is not considered a crime, or a conspiracy against the state, then it can reasonably be assumed that only fools pay taxes in Pakistan. Leona Helmsley, wife of a real estate tycoon and an American billionaire was imprisoned because she stated that only little people pay taxes. The lady was punished although her husband was willing to pay hundreds of millions of dollars if the state was willing to let her go unpunished. The state not only recovered all the unpaid taxes but also punished and subjected her to public rebuke by exposing her identity. In sharp contrast, our FBR is protecting the identity of 4,000 companies who have claimed fake refunds, while another 7 lakh have managed to escape the tax net.
Tax evasion is a white collar crime, which can only be committed with connivance of revenue collectors, expert professional accountants and tax counsellors. Leona Helmsley was punished because the state could not afford to let a high-profile tax dodger go unpunished. In the developed world, tax evasion is considered a major crime and a conspiracy against the state which cannot function without tax collection.
The whole state system collapses if the rich do not pay taxes. No state or system can survive without disbursing welfare to the most deprived sections of society.
Unfortunately in Pakistan, state resources are being utilised to provide subsidised housing and benefits to its paid servants, or elite members of so-called civil society, who already enjoy immense benefits and exemptions, while basic necessities such as health, education and clean drinking water are being denied to the poor.
In Karachi, compensation of billions of rupees was awarded to shop owners, whose godowns were burned on Bunder Road during the Ashura procession riots, although their individual tax declarations were very nominal.
It is the state which has to enforce the culture of paying taxes by giving exemplary punishment to high profile tax evaders and the tax collectors who facilitate them in such anti-state activities. There is no rocket science involved in documenting the economy; all that is required is political will and some level of integrity. Nobody has yet been punished for the thousands of containers that have gone missing, in spite of the fact that they have contributed to the spread of lethal weapons and terrorism in the country. The time for documenting the economy and reforming the tax structure is now.
MALIK TARIQ ALI
Lahore
(II)
Government plans to generate Re 70b from rich tax evaders; reads a front page headline in your edition dated 25th May. I hope it will include our champions of democracy and protectors of poor masses like the president, prime minister, leaders of the opposition and most of our democratic representatives.
I know my hope is false and this will not happen but as we are living in fools’ paradise where no one will be “allowed” to play with people’s lives, where all “democratic” forces will bear all the personal losses in the “greater” national interest. This is a fool’s paradise where load-shedding has been tackled by Raja Pervez Ashraf in December 2008 and where there is no issue of availability of basic commodities. So, all is very well. Bury the head in the sand and enjoy life.
Col (Retd) SYED MAZHAR
Lahore
