Tax reforms: get started yesterday

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Six months into power and after all the exhortations to diaspora for donations, and loans and investment pledges by the ‘friendly’ countries that are yet to materialize, the government has started to realise that an efficient tax collection system is the only way forward if the budget deficits are to be tackled.

With budget deficit widening, exports dipping and defence and debt servicing taking away a major chunk of the budget as always, the government is under increasing pressure to increase the tax base, and quickly.

One could not agree more with the prime minister when in a tax awards ceremony Wednesday he said the true VIPs of Pakistan were those people who pay the most tax.

The PM uttered all the right words or phrases if you like: trust deficit between the citizen and the state, rich subsidising the poor, need for austerity, FBR reforms et al.

Nothing that we have not heard before. Turing all the good ideas into action is where the mettle of a man is tested.

During the last financial year only 1.7 million people filed tax returns in a country of 210 million. The PM says figure is low and the government is forced to impose indirect taxes which are indiscriminate in nature. This does not sell well.

The PM should know that filing a tax return and paying tax are two different things.  Do we have statistics as to how many of these filers actually pay taxes?  And how many are out there who pay tax but for some reason do not become a filer? Unless we have those stats, no informed decision can be made.

What steps has this government taken so far to restore the trust of people in government? The PM was confident of people donating to the dam fund but it has back fired so clearly people’s trust in him or his government does not stand where he thinks it does.

He said it is his mission to tax those people luxurious lifestyle but how as the mini budget is exactly the opposite of this statement. There are many incentives for moneyed class in that ‘package.’

PTI government claims of reducing expenses so far are merely claims and only an independent source can verify those big claims. If the PM House is no longer a PM house, how come one utility bill for the house that did rounds on social media was higher than previous months when PML-N was in charge.

Under these trying times, removing disparities – a word that Mr Khan is fond of – in health and education and infrastructure development so that the rich and the poor both could avail equal facilities is a big ask of the government. It is yet to be seen if PTI does something tangible to remove this disparity that it has been shouting about from atop the containers.

The prime minister hoped that the country’s annual tax revenue would rise to Rs8 trillion from a current Rs4.5 trillion. It’s a long haul, sir. Get started yesterday.