Us and them

Responding to public opinion and scathing criticism following the Panama leaks disclosure, the British government has imposed 15 percent tax on all second home buyers operating through offshore accounts. This is what differentiates a First World country and a Third World nation like Pakistan where the finance minister announces on the floor of parliament a 10 percent tax on actual profits earned from real-estate sales if sold within five years – only to retract it later. It has become routine in Pakistan that every government announces a major tax imposition to curtail black economy, and then either withdraws it or dilutes it, thereby consolidating the black economy. It seems in Pakistan only fools pay taxes. In developed countries, where the tax-to-GDP ratio is high, representation comes with taxation. In developing countries, it is the affluent who get tax reliefs, the documented economy shrinks, black money is parked in tax-free real estate and tax evaders dominate parliament.

Another factor common in the corrupt developing countries is that their ruling elite continues to be beholden to their former colonial masters, contributing to their economies by pilfering their own national exchequer and buying properties, assets and business there, announcing mega projects which offer kickbacks. This also helps unfriendly foreign powers to exploit and recruit locals, as and when required to achieve their nefarious design. Major political decisions are made abroad, while political parties are headed by individuals who hold foreign nationalities. And yet we celebrate Independence Day with such fanfare.

Malik Tariq Ali

Lahore