Myth of educated decisions

The recent upheaval on imposition of withholding tax on banking transactions speaks volumes about the way fiscal decisions are made and implemented

Myth of educated decisions

"It is no crime to be ignorant of economics, which is, after all, a specialised discipline and one that most people consider to be a ‘dismal science’. But it is totally irresponsible to have loud and vociferous opinions on economic subjects while remaining in this state of ignorance" -- Murray Rothbard

There is a famous saying that a wise man never knows all while only a fool knows everything. In order to arrive at some concrete decision, it therefore becomes imperative to consult with different persons who are knowledgeable in a variety of subjects and who have the capability to effectively forward their views, debate sensibly and help decision makers to reach a conclusion.

Although it is assumed that members of the parliament are educated, it may not be necessary that they excel in their respective fields nor is it possible that they would all be well-versed in principal subjects of governance let alone be proficient in drafting laws. After all, leaders are supposed to display characteristics of consolidating and harnessing politics, have an inspirational influence on the people and be motivating enough to urge the country towards progress and prosperity.

With this objective in mind, parliaments of civilised democratic countries constitute select/standing committees that do most of the brainstorming and submit their proposals for prospective bills, tabled by the government or any member as a private bill, to be discussed during parliamentary sessions and eventual adoption as an act.

In the United Kingdom, the select committees, assigned with the job of devising and proposing draft laws, sometimes take two to three years to put forward a suitable piece of legislation. During this period, the committee, that comprises not only members of parliament but also include scholars, professionals and stake-holders spend quality time in doing research, compiling reports, preparing and discussing draft laws that are subjected to many critical readings until the end result is sent to the parliament.

Despite this intensive work, the draft law, when placed before the House of Commons is thoroughly scrutinised, debated and at times, returned to the committee for reviewing in the light of new comments or proposals. It is after meaningful debate and thorough deliberations that a bill, depending on its nature, is sent to the House of Lords, and after their approval/acquiesce is ultimately adopted as law. Such is the process of what maybe called an ‘educated decision’ in matters of public interest.

Nothing that tends to burden the people or create economic hindrances for them is decided by merely studying some official statistics while sitting in the confines of a comfortable office, totally oblivious to ground realities and without determining repercussions of impulsively made decisions. Such short-sightedness often causes embarrassment to public office holders not to talk of the resentment that is openly displayed by the public.

We in Pakistan are quite accustomed to being subjected to occasional bouts of erratic legislations that attract tremendous hue and cry from the public. This mostly happens during the mid year at the time of announcement of the annual national budget and presentation of the Finance Act that brings in its fold many undesirable, repulsive and unpleasant surprises for the unsuspecting people who are still considered as ‘colonial’ subjects [except this time the masters are not white Englishmen but the local Gora (read brown) Sahibs and baboos], who can be lashed into submission against their wishes and not have the right to question the inhuman treatment meted out to them.

It is common knowledge that whenever increase of financial burden is intended, there has to be a balance off in the form of some privileges and benefits. Gone are the days when taxation, in particular, did not come with the concept of quid pro quo. Now, the public has high expectations in return for the multiple taxes that are paid to the governments, both federal and provincial.

The element of rebellion against revenue departments is purely on account of the governments’ insensitivity towards the people’s fundamental needs. The less these are addressed, the more the level of aggression will rise, forcing low compliance and high defiance, making matters more frustrating for tax collectors.

Despite the fact that around 10 million persons (affluent segment of the population) are earning substantial income to render them liable to filing income tax returns, the number of return filers is rapidly going down (from 1,443,414 in 2011 to 856,229 in 2014) compelling the revenue authorities to introduce the notion of ‘filers’ vis-à-vis ‘non-filers’ penalising the latter with heavier rates of advance taxes. Implemented for the last couple of years, it has been observed that discrimination on this point alone has not been successful in securing a satisfactory increase in income tax return filers. On the contrary, a downward trend is apparent from the official statistics found in the government documents (Irritatingly oppressive taxes, Business Recorder, July 13, 2015).

This is a clear indication of the extent of inputs in arriving at the so-called ‘educated’ decisions by law-makers (sic). Had there been a good standard of contemplation, discussion, research and information, decisions would be based upon logic rather than hasty deductions from a set of questionable statistics.

The recent upheaval on imposition of 0.6 per cent withholding tax on banking transactions vide Finance Act 2015, invoking agitation by various trade bodies and eventual reduction to 0.3 per cent by the government, speaks volumes about the way educated decisions are made and/or implemented.

Each year, the public looks forward to a budget that would provide greater relief and lesser cumbersome taxes and procedures but their dreams are mercilessly shattered on the altar of self-styled reformers sitting in important government positions who, by virtue of their grades, consider themselves intellectually competent of the highest order, who need no counseling or advice when arriving at crucial decisions having implications on the national level. Unfortunately, both their high-handedness and thoughtlessness prove more a disservice instead of being beneficial to the country. This further emphasises the necessity of having capable persons at the helm of affairs rather than elevating them on the basis of their honesty, a characteristic that should be in-built in all public functionaries and not requiring acclamation on the public level.

A historic analysis would endorse the view that the essential requirement for fulfilling the aspirations of this nation is a functionary who has the sense necessary to significantly enhance revenue, the sensibility to considerably reduce extraordinary burden, both in terms of finances and procedure, from the shoulders of the people, the courage to call a spade a spade and the ability to foresee the outcomes of important decisions.

Public office-holders such as ministers and parliamentarians must be aware that their survival and perpetuity depends upon a number of factors, the chief among them being a conscious application of their mind on highly critical issues. This of course is in turn dependent upon their faithfulness to the country, their respect for the Constitution, their empathy with the people, especially the down-trodden and focusing on their own work i.e. legislation.

On the other hand, members of the executive should concentrate on their own scope of jurisdiction instead of trying to put themselves in the shoes of legislators. When everyone in the line of hierarchy performs his own functions with efficiency, there is no reason why Pakistanis cannot be tuned into a law-observing nation with Pakistan becoming a hub of progress and prosperity where truly educated decisions are made for everyone’s betterment.

Myth of educated decisions