Tax Time in Pakistan: Owning our Reality

Posted on September 20, 2010
Filed Under >Faris Islam, Economy & Development, Society
19 Comments
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Faris Islam

As we ready ourselves to essentially pay our national bills and file taxes on September 30th, this piece by Mohsin Hamid from earlier this year resonated with me – though it talks about raising taxes, just the simple act of actually paying taxes would go a surprisingly long way in alleviating so many of the nation’s problems.

That our nation is going through tough times barely needs repeating – even before the floods, millions were homeless, lacked food and water security and had little hopes of breaking out of the vicious cycle of poverty and hopelessness they, as well as generations before them were all born into.

Mohsin Hamid asks the question we should all ask ourselves in the face of this bone-crushing poverty and desperation, “Why isn’t Pakistan delivering what we hope for? Because of dictatorships, or India, or the Americans? Well, maybe. But these days a large part of the reason is this: we citizens aren’t paying enough for Pakistan to flourish.”

Unfortunately we’re all too familiar with the situations he describes, as Mohsin Hamid mentions:

“On my travels around our country I haven’t just seen malnourished children and exhausted farmers and hardworking 40-year-old women who look like they’re 80. I’ve also seen huge ancestral landholdings and giant textile factories and Mobilink offices with lines of customers stretching out the door. I’ve seen shopkeepers turn up to buy Honda Civics with cash. I’ve seen armies of private security guards, fleets of private electricity generators. I’ve seen more handwritten non-official receipts than I can possibly count.

Many of our rich have tens of millions of dollars in assets. And our middle class numbers tens of millions of people. The resources of our country are enormous. We’ve just made a collective decision not to use them.”

With millions more of our people now on the brink and our state and society growing increasingly mired in conflict, now is the time to rethink this decision.

We all want schools that actually educate, water that can actually be drunk and a judicial system that actually provides justice, yet in a multitude of small decisions every day we undermine our progress on extending the promise of Pakistan to all Pakistanis.

How? To quote Hamid once again:

“There’s no doubt that much of officialdom is corrupt. But so are we, the citizens. Every time we accept a fake receipt, or fail to declare a bit of income, we are stealing from our country in precisely the same way our politicians and bureaucrats are.”

Beyond filing our online forms with the FBR, we need to own up to our larger reality: there are many of us who benefit – directly or not – from this broken system. We know the inequalities and injustices perpetuated by this cycle of corruption and cheating, but all too often encourage, accept or patronize this system for our own benefit, at the expense of millions. Doing something as seemingly trivial as bribing a traffic cop (or KESC employee, or customs officer or anyone else working for the government) may avoid us some inconvenience or effort, but also retards the institutions and offices we need so desperately for our state to function.

We need to look deep within ourselves – as individuals and as a society – and decide: is it worth it?

19 responses to “Tax Time in Pakistan: Owning our Reality”

  1. Umar Sharif says:

    We the People OF Pakistan…. Needs to do something now!

  2. readinglord says:

    @Watan Aziz

    Well said dear! This so called ‘Zakat Tax’ which is deducted indiscriminately from the bank accounts is the most cruel and heinous thing done in history in the name of Islam by a fiendish usurper. They did not spare even the account of my disabled daughter for whom some donation had been left by her marhoom naana jan. No government is going to stop it now as it provides them a free handle to use greedy merchants of religion running madrissahs and loudspeaker-houses spreading Mullah’s deen-e-fassad.

    Has it not made the entire nation a partner in war against Allah and Rasool by mockery of Islam’s prohibition of interest?

  3. Kashif says:

    You cannot expect a sane human being to keep putting a portion, no matter how small or large, of his hard earned living into a pool that is completely invisible to him, where the watchman over that pool has no accountability and where he clearly sees no proportionate return of his contribution. Taxes are part of a social agreement that every human being makes with the ruling authority where he states that he will keep paying the salaries of the authority with his hard earned living as long as the authority provides him the basic necessities of life in return.

    Sacrificing for your country is a noble deed, but paying taxes is not a sacrifice – it is one side of a simple equation. Do not expect any human being to act against common sense.

  4. Watan Aziz says:

    That the tax is more than the cost of an item is a reflection of the mismanagement and poor governance in Pakistan. This is a crime by itself.

    The indirect taxation and the resulting inflation (which is a tax by itself) is a tool to collect monies from all Pakistanis. If you eat “daal-roti”, you are ensnared in the taxation system.

    But this is unfair (so what is new in Pakistan) to the salaried and the poor. They pay a disproportionate portion of their income in taxation while everyone else gets away with it.

    BTW, beyond the income tax mess, there are protected categories of customs for many industries, including media that need to be removed.

    Then there is the bogus taxation (it is bogus because it is imposed, in addition to and not instead of taxation) of “zakat” imposed by the evil usurper has manged to make more people declare that they belong to “Jafria” school than actually are. A yet another crime of that mocks faith of the people. Another reminder to rebuke the evil usurper and his cohort Brohi. (Your will be rebuked and rebuked often as a reminder to those who aspire to conspire.)

    And last, but also the most important, the “istaamp” tax (property tax) also needs to brought in line. Just about all the properties are declared and pay a fraction of what they are really worth.

    And finally, (why should I stop?) the fraud perpetuated by the oligarchy (read mafia) of the chartered accountants need addressing as well. The reason most of the taxation is evaded (different from avoided) is due to active and willful conduct of the chartered accountants. And also the fact that they rig the exams so as to limit who can be (and cannot be) is a gross shame on the institution of education.

    Needless to say, the entire CBR and taxation in Pakistan needs some sunshine.

    People will pay their fair share, if the share is fair!

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