Scot-free

Endless tax amnesty schemes and subsidies under the garb of welfare schemes and incentives to boost the economy have boosted the culture of loot and plunder. Pakistan has suffered and today we are in a deep economic crisis. Ever since the first amnesty scheme was launched in 1958, tax evasion has haunted Pakistan’s economy. Musharraf floated another two schemes in 2000 and 2001, which even cabinet members benefited from. The PPP offered another scheme in 2008 despite swearing before parliament that they would not. The PML-N followed suite by offering amnesty schemes in 2013 and 2016 to non-custom paid imported cars and other assets.

The incumbent government came to power with an agenda of reforms and broadening tax net through digitalisation. However, in 2019 it too offered a generous scheme under the Assets Declaration Ordinance 2019. The ordinance declared that the tax rate for all undisclosed assets – except domestic immovable properties – would be a meager four percent. In 2016, India declared an amnesty scheme, but the tax rate for undeclared assets was 45 percent. Given the immense political clout they have, it is no coincidence that the biggest beneficiaries of subsidies and tax exemptions are cartels giving the highest dividends to their shareholders in 2021. As these cartels reap a harvest, tax collection has decreased and this will worsen the ever-widening deficit between state revenues and expenditure, leaving no fiscal space to provide relief and subsidies to the most deprived sections of society.

Malik Tariq Ali

Lahore