The matter of tax collection remains painfully clichéd. Everyone knows everything about it and yet nothing gets done. Thoughtful op-eds keep getting written, new reform commissions are set up with regularity, reports on how to sort it all out are continuously being produced by national and international policy experts.
In that respect, this is yet another Special Report on the subject, talking about the same issues and unfortunately reads like meaningless jargon. We ask Dr Ijaz Nabi to name a few creative ways of improving the tax base and this is what he has to say: "Minimise exemptions and special treatment of individuals/economic activity; bring about horizontal equity among tax payers; have credible audits; put the full authority of the state behind FBR; improve service delivery."
Familiar solutions one might think that have been heard many times before. So, perhaps, we don’t need any new thinking. All that is required is a commitment to implement the received wisdom. Ijaz Nabi may have prioritised it for us -- minimise exemptions first and then move on to administrative reform.
The reform is an ongoing process and Pakistan has already set it into motion. This time there is greater noise because the government has stuck to its decision to impose a withholding tax on all banking transactions on all non-filers of tax returns. This is a smart move and would help the government in documenting the economy.
In today’s Special Report, we have focused on the other measures the government must take apart from this. These include minimising tax exemption, reform of FBR and widening the tax base. We have looked at the frenzy among people, more of whom seem keen to file their tax returns this time. The government needs to make sure they let the people do it in an atmosphere of confidence rather than fear.
Read Dr Ijaz Nabi’s interview: "Reforms about tax administration are as important"