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Fleeting moments

November 23, 2019

Taxpayers’ refrain


November 23, 2019

Almost every government that comes into power repeats a familiar mantra that people do not pay taxes. That paying tax is the duty of every responsible citizen towards the state enables it to perform multifarious functions in the public interest. Tax evaders, on the other hand, contend that the government shows little respect for their hard-earned money paid in taxes. As usual, it’s a two-way story.

In many developed countries, citizens are taxed according to their earning and they pay their taxes willingly. The taxpayers are confident that they will get more than the worth of their taxes by way of free or subsidised health and education facilities, not to mention the guaranteed security of life and property.

On the contrary, successive governments in our country resort to indirect taxation. For instance, when the prices of utilities are hiked up, everyone stands taxed. Even the poor labourers bear the impact of indirect taxation. The worst affected by the frequent increases in utility bills are the low and mid-level sections of society. This class of people least understands the rigmarole of obtaining an IMF loan and its trappings; all it understands is which party made its daily lives easy and sustainable.

And those who pay taxes have little say in how their tax money is used. Typically, a businessman who feels squeezed out normally before September 30, which is the last date to pay income tax, cannot help wondering where the tax paid out of his hard-earned money will be utilised. That’s the time when the caricatures of large parasitic organisations such as PIA, Pakistan Steel Mills and Railways come dancing before him/her. These are the white elephants his/her taxes would help to prop up, s/he imagines.

During a recent Supreme Court hearing about PIA, Justice Ijazul Ahsan said that the airline suffered a loss of billions of rupees by awarding free tickets to PIA staff and many more given to freeloaders as freebies. The cumulative loss the airlines suffered in the last eleven years stands at Rs1.8 trillion. Shockingly, we kept the airline going instead of privatising it. The maxim ‘cut your losses and run’ should have come in handy years ago. Whose money sinks years after years if not the taxpayers’?

It’s encouraging to know that the Cabinet Committee on Privatisation lately stressed over the need to privatise PIA Investments Ltd. Why not privatise the airline itself? Similarly, why maintain the PSM -- shut down since 2015 -- on government inventory? The PTI government decided to privatise 20 public-sector entities in the first phase of its privatisation programme. The basic concept of government indulging in commercial activities is not viable.

A commercial project conceived by the government might start with much aplomb but end up on the chopping block of privatisation sooner than later. A private commercial project has to be profitable to continue its operations but a similar project in the public sector will continue to operate despite losses.

The financial wizards in government paint the business community as notorious tax shirkers. Now ask the business people why they are reluctant to pay taxes willingly. Their foremost objection is that their tax money is wasted on lofty projects, raising unnecessary departments, and maintaining layers of bureaucracy. One often observes even mid-level bureaucrats chauffeured around in swanky official cars and SUVs. Observe the security details of the VVIPs when you’re waived to stop and wait on the roadside and, of course, sulk. What a misuse of tax money.

Our governments are too big for the size of our economy. A large government doesn’t mean it’s efficient too. Small government rules best. And, according to Thomas Jefferson, “That government is best which governs least”.

The writer is a freelance columnist based in Lahore.

Email: [email protected]

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