Ombudsman of Tax Evaders

If his party is elected, Nawaz Sharif has a plan for the economy – reduced taxes for the rich. No, I’m not joking. This is what he actually told Hamid Mir. Listen as two of the most privileged in our society discuss how they think the rich should do even less to support our country.

According to Nawaz Sharif, the problem is that the rich are being to asked to contribute too much to their country, and so instead they contribute nothing. The solution is to ask them to contribute less to society in the hopes that they will be willing to do so. In other words, keep cutting taxes on the rich until you find their limit. But the rich have already set the limit on what they’re willing to pay, haven’t they? And it’s not 10 percent, or even 5 percent – it’s zero percent. Nothing.

NADRA recently announced the results of its latest study on tax evasion: over 2 million of the richest people in the country pay exactly zero in income taxes.

Even more interesting is the fact that there are 1.611 million people who frequently embark on international tours but do not pay a single penny as income tax.

About 584,730 Pakistanis have multiple accounts in domestic and multinational banks, but do not possess NTNs.

The FBR has bound banks to deduct a meagre amount of less than one per cent at source less tax on cash withdrawals of more than Rs50,000 in a day, but it doesn’t issue notices to bring them under the tax net.

Over 56,000 people live in posh areas and more than 20,000 people own luxury cars, but pay no income tax.

The solution to this crime – because that’s what tax evasion really is, isn’t it? Stealing from the national treasury? – is not to ask the thief what he is willing to pay, it is to make improvements in enforcement and collection so that the thief learns that stealing is not profitable.

It is these reforms that have finally started to improve tax collection in the country. Tax authorities increased revenue generation 28 per cent in the first five months of fiscal year 2011, and earlier this year, improvements in enforcement of the tax laws netted an additional Rs1 billion every month. That doesn’t mean that more doesn’t need to be done, obviously it does. But it means that the current efforts to reforming the systems of tax collection and improving enforcement of tax laws are making an actual difference. They should be allowed – and encouraged – to continue.

Giving a tax policy of begging the rich to pay whatever they feel like is a blatant expression of the feudalistic thinking that has dragged the country down and kept us from achieving our full economic potential. Federal Tax Ombudsman (FTO) Dr Shoaib Suddle told the media, “I am the ombudsman of taxpayers and not of tax evaders.” So what does that make Nawaz Sharif?

Author: Mahmood Adeel

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2 Comments

  1. Mahmood Adeel stop cribbing! We are the only nation that claims ” Right to protect ALLAH and HIS Property.”
    Anything further to discuss is Blasphemy!!

  2. A tax amnesty scheme is already on the cards. Has anyone courage to challenge it and get it declared unconstitutional by the Supreme Court of Pakistan by following NRO judgment. I put this question to a leading writer lawyer against such schemes. He was mute as he feared backlash from his clientele.

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Author: Mahmood Adeel