Taxing the rich is my mission: PM

ISLAMABAD: Prime Minister Imran Khan Wednesday called for widening the tax net by not raising tax rate and reminded the nation that Pakistan simply could not prosper if just 1.7 million people paid taxes in a population of 210 million.

“The government is forced to impose indirect taxes on the common man who often cannot bear this burden as a result of disparity,” he said while addressing a ceremony at the Prime Minister office (PMO) to honour 50 high tax payers of the country.

Imran said it was "unfair" that the prime minister was paying same tax on things like petrol and diesel as was a daily-wage labourer. He recalled that only 72,000 people from across the country had declared an income of over Rs200,000, but added that it was "understandable" if people shied away from paying taxes because of their concern that their money would not be fully utilised for the uplift of lower segments of society.

Meanwhile, former prime minister Shahid Khaqan Abbasi decided against attending a luncheon hosted by Prime Minister Khan for the top taxpayers. Interestingly, Abbasi declined to turn up for the ceremony as the fifth highest tax payer of the country and the only Islamabad resident among the top 100 taxpayers.

His name was prominent in the list of tax payers who were awarded on the occasion. In his speech, Imran Khan said the true VIPs of Pakistan were those people who paid the most tax and such citizens should be facilitated and honoured.

He said there was need for changing the mindset under which wealth creation was considered a "sin", so that people could be encouraged to invest in Pakistan. “People who don't pay their taxes should keep in mind that the country's economic situation would worsen if we don't change our mindset today,” he said.

The prime minister said the government was working on a comprehensive plan to promote tax culture, reduce tax rate, encourage tax payers and bring maximum people to the tax net. He regretted that Pakistan had not adopted modern concepts from the state of Madina, the most important element of which was collection of Zakat from the affluent which was then spent on the masses welfare.

"It is my mission ... to tax those people in Pakistan whose luxurious lifestyles do not match with the amount of taxes they pay," Imran said. He said his government had adopted austerity and directed all ministries to cut their expenditures by 10 per cent.

"I have reduced expenditures of Prime Minister House by 30pc ... saving Rs150m so far," he stated. He regretted that on the one hand there were not enough medical facilities for the poor in the country, on the other former prime minister Nawaz Sharif, his family members and other PML-N leaders wanted to go abroad for their medical treatment.

"Taxpayers' money is not for our personal indulgence," the prime minister said, assuring the people that their money would be spent on their own welfare. He said the government was making efforts to develop a tax-paying culture, including through reforms in the Federal Board of Revenue (FBR) and by moving towards e-governance to minimise interaction between the tax collector and taxpayer.

Once the system is fixed, the country's annual tax revenue would rise to Rs8 trillion from the current Rs4.5 trillion, he hoped. Imran Khan said under the plan, mindset of the entire nation will be changed to pay taxes to materialise the idea of forefathers of the country to make Pakistan a truly welfare state.

“Our tax system is the most complicated one with poor structure the world over and we need to immediately revamp it with revolutionary reforms in our economy, FBR and the taxation system. The government has decided to introduce digitalization to facilitate the tax payers and reducing undue intervention of FBR officials in tax collection.”

He directed the Ministry of Finance and FBR to focus on promoting direct taxation to collect wealth from the elite class and spend it on the welfare of poor people who were paying equal taxes through the indirect tax system.

“There is nothing wrong in being wealthy and it should not be something thought of negatively,” he said. He called out citizens who don’t pay tax, saying Pakistan will not be able to survive without everyone contributing.

Finance Minister Asad Umar said the tax that the government collected annually was simply not enough to run the country’s affairs. He said other economies of a similar size collected more taxes than Pakistan.

He said the first measure in the drive to increase the tax-to-GDP ratio should be making it easy for people to pay taxes. The minister pointed out that all of FBR's laws were in English – a language understood by only a small minority in the country.

Additionally, he said, gathering of information by FBR should be technology-based and people should only be asked the most essential questions. The second step should be making it impossible for people who do not pay taxes to "find a place to hide".

"There is no need to run after hundreds of thousands of people for this, just catch the big fish and the message will automatically reach down to the masses," the minister advised the revenue authorities.

Thirdly, he said it was a right of Pakistani taxpayers that their money was spent only on welfare of the country. "That money cannot be used to build properties in London, or to store in banks of Switzerland, or to erect towers in Dubai," he said.

Meanwhile, Shahid Khaqan Abbasi said in the media interaction at another place that he had been paying his taxes for the last 32 years. Abbasi said he had received an invitation for the luncheon last week but he was not in the country at the time.

He questioned "what he could avail" by attending a ceremony hosted by a prime minister and his cabinet "who themselves do not pay taxes". He said it was Prime Minister Khan's duty to reveal before the public how much tax he and his cabinet members were paying.

Shahid Abbasi alleged that the FBR had committed an "unlawful" act by issuing a list of the top taxpayers. "It is a confidential matter which is not made public," he said, adding that parliament released its own list of members who were taxpayers. Abbasi is now back in the country.