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When First World politicians lecture Third World Failed States like Pakistan on a particular issue, we all can take different positions on such an occurrence depending on our psychological, ideological, ethnic and geographical dispositions.
First question: To what extent has the USA "Friendship" and aid over many decades contributed to the Failed State situation of Pakistan? What kind of "Friendship" does the USA provide to Pakistan? Is Pakistan a failed State because of the ineptitude and stupidity of its people, OR because of America, destabilizing Pakistan and bringing its puppets into power subsequently after destabilization?
Question two: Why does America feel comfortable supporting criminals and gangsters into political power in Pakistan? Asif Zardari......$3 billion stashed away in foreign accounts, and everybody in Pakistan knows about it.
Question three: Precisely what type of government do the Americans expect from a gangster administration, which most Pakistanis don't like? Ditto Afghanistan.
Pakistan's tax base is very low, and the budget only accounts for about 15% of the official GDP. The Tax system is haphazard and ineffective, and if you are rich, powerful with the right connections..................you don't pay tax, simple. Also the budget is only 15% of the official GDP. The unofficial economy could be anything from 20%----80%, that's a massive black economy which hasn't been included in the official taxable economy/bracket.
"It is tragic that in a country where billions of rupees are being made through corruption, speculative transactions in real estate and shares, the tax-to-GDP ratio is pathetically low [below 9% in fiscal year 2008-09] and the Government is least bothered to tax the undocumented economy and Benami transactions. The mighty sections of society are engaged in these transactions and corrupt practices.
The Federal Board of Revenue (FBR), being their handmaiden, has neither the will nor ability to tax them. It proves the failure of the FBR as an institution to tap the real tax potential of the country. It should be given full autonomy, as is available to the State Bank of Pakistan and only then the cherished goal of taxing the mighty and the ruling elites can be achieved.
There should also be a public campaign that the absentee landlords and mighty military rulers and their civilian (sic), handpicked members of parliaments should also be divested of all the privileges and exemption enjoyed under the various tax codes.
The definition of business , given in the Income Tax Ordinance, 2001, covers adventure in the nature of trade and yet our tax machinery is sitting idle, causing a colossal loss to the national exchequer, by not bringing adventures in the nature of trade in real estate into the tax ambit and giving undue tax exemptions on gains arising on speculative transactions in shares and stocks.
Our tax-to-GDP ratio can rise to 20% in one year if we tax speculative dealings in real estate (this will also help in promoting the construction industry as the prices of land will come down) and bring the black economy into the tax net. Instead of performing its prime duty, that is levy of tax where it is due, the FBR is busy pondering over many issues relating to the tax policy and administrative reforms, which are, in fact, the job of the Parliament.
It appears that the FBR is more eager to do the job of legislators, rather than performing its primary function of levy and collection of taxes - drafting of VAT law is a case in point. The real tax potential of Pakistan, by a very conservative estimation, is not less than Rs 4 trillion (Corrupt kleptocracy Zardaris junta is struggling to raise Rs 1 trillion........2009---2010). However, the target for the current fiscal year, at the time of budget announcement, was fixed at Rs 1.38 trillion - the FBR, a corrupt and inefficient arm of the government, is facing difficulties even to achieve the Rs one trillion target.
What a tragedy that the rich and the mighty, not only refuse to pay the due taxes, but are also living a shahhana zindagi (emperor-like life) at the taxpayers expense. They are the de facto beneficiaries of State s resources - generated mainly by the landless tillers and industrial workers.(I would also add the Middle Class who are also suffering)
Pakistan is not a poor country - the State s kitty is empty because of the unwillingness of the rich to pay taxes, the colossal wastage of the taxpayers money on unproductive expenses and the non-exploitation of the vital natural resources.
(PPP economy $500--$600 billion, so its budget can be $100---150 billion..........Pakistan does not need foreign aid)
The absentee landlords (which include mighty generals, who have been allotted State land under one pretext or the other during the last many decades), acting as proxy rulers of the establishment and foreign Late Neo-Colonial masters, have been resisting proper personal taxation on their enormous income and wealth.
An unholy anti-people alliance of a trio of indomitable civil-military bureaucrats, corrupt and inefficient politicians and greedy businessmen - controlling and enjoying at least 90% the state resources - contribute below than 5% in national revenue collection.
The gigantic and useless government apparatus - doing nothing for public welfare - is also busy wasting whatever taxes are collected. The army of ministers, state ministers, advisers, consultants, high-ranking government servants (sic) is not willing to cut down their perquisites and privileges.
They are not ready to live like the common man by surrendering unprecedented perks and privileges that they are enjoying at the cost of the taxpayers money. For their shahhana zindagi, they are burdening the poor, the propertyless masses, with more and more taxes.
TAXING THE POOR FOR THE RICH!
The people of Pakistan are the most heavily taxed nation in Asia. The privileged classes - ruling the country for the last six decades - are the culprits who do not pay due personal taxes on their colossal wealth and incomes and are beneficiaries of huge loans write offs. They are guilty of plundering and wasting the public money.
The State has become so callous that the people living under the poverty line are also subjected to tax on the purchase of salt, being sold under brand names. People are dying of hunger in camps and elsewhere and abandoning their children at Edhi Welfare Center, but President, Prime Minister, Governors, Chief Ministers, the army of ministers, state ministers and their lackeys are wasting millions on their security , personal comfort, lunches, dinners and visits (domestic and aboard).
The existing exploitative, rotten, regressive, ill-directed and unfair tax system is widening the existing divide between the rich and the poor. The sole stress on regressive indirect taxes [even under the garb of income taxation through presumptive tax regime on goods and services], without evaluating its impact on the economy and the life of the poor masses and lack of political will to tax the rich and the mighty is our dilemma - not the scarcity of resources or the narrow tax base.
Equity demands higher taxes from those who have higher income and wealth, but in Pakistan since 1991 all the policies have decreased the tax burden on the rich and increased its incidence on the poor. We have declining trends in the tax-to-GDP ratio and now we will have to wait for many years more to come up to the level of many developing countries. This is indeed a sorry state of affairs." forex pk.
The burden of the tax system falls on the middle class, and commercial class in the minor and medium league. The most productive sections of society pay tax, whilst maybe 80% of the rest don't.
The super rich of Pakistan such as the 500 Zamindar/Tamindar families, and 30 commercial families don't really pay tax; Secretary of State Hilary Roddam Clinton is absolutely correct (Though she might want to take a circumspect look at America and its Super rich 1% who own a massive 50--80% of the countries wealth..........and a class which under the Bush junior era gained enormous tax reduction benefits, whilst the under class increased to 40 million, and for the first time food insecurity among tens of millions in that country)
Hilary is right, the problems of Pakistan is the elite, and the super rich, though one must add that none payment of tax is not their only short coming. Their other weakness is their fondness for Bilaat, and Amerikka, where they send their children for education..............Macaluey's Brown Sahib's, and thus though physically they may inhabit Pakistan, especially during the winter season, psychologically and spiritually they are in LONDON, and NY.
When ANY country has that type of ruling class, it must fail.
The super rich of Pakistan such as the 500 Zamindar/Tamindar families, and 30 commercial families also stash their cash in foreign tax havens, because for some reason they have no faith in Pakistan as a viable state, in which they can invest which might yield them good returns. The figures as to how much are stashed in tax havens are inaccurate, but taking neighboring post-colonial India as a barometer where the elite in that impoverished nation have stashed away $1500 billion in tax havens, then in Pakistan's case it should be around $200---$250 billion.
What could Pakistan do with $200--$250 billion? Yet it lies idly in Jewish Banks in Switzerland, London and New York.
Hilary is right, investment in a nations education system, and health care increases the overall welfare and wealth of the country. Stands to reason that the more a nation invests in education and health the more a nation prospers...........there are millions of research papers, governmental and non-governmental which have verified this fact. Pakistan spends only 2% of GDP on education.....use to be only 1% during the 1950--1990's, but they have "progressed" in their thinking, and still less on health care.........the average physical size of Pakistanis is shrinking, this nation which once was the bastion of world class wrestlers. Pakistan needs to spend at least $5--7 % of GDP on education. A nations success is built primarily on the educated Middle class.
But one ponders why Hilary made this statement...............she is an ardent supporter of both the criminal junta's in Pakistan and Afghanistan, and there are rumors, only rumors that she is part of the cabal that is making profits from the Afghan Heroin. So whats going on here? Is she's completely out of touch and seriously deluded in thinking that Karzai's narco kleptocracy, and Zardari's mafia enterprise are going to turn the corner next week cus Memshahib Hilary Clinton told them to get their act together?
Or is this some kind of super Jew sarcasm, or sick joke against the impoverished Third World oppressed people of Pakistan?
Good governance and good taxation systems have existed before of course in the vicinity of Pakistan, especially under the rule of Sher Shah, and of course Akbar the Great. Maybe the elite of Pakistan do not know this, but informed Pakistanis do. Akbar's land tax system was unique for its day when it was introduced in the late 16th century, and extremely effective. Indeed it was so successful, the Chinese Qing dynasty copied it one hundred years later. And he ruled a country that was the richest on earth for its day.
Though he had enormous respect for other cultures which he overtly expressed, psychologically and spiritually he was firmly rooted to his country. The elite of Pakistan are not, and therein lies the problem.
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Clinton to Pakistan: Tax the Rich, Increase Social Spending
With New Tax Hikes Already This Week, US Presses Pakistan to Soak the Rich
by Jason Ditz at Antiwar.comThere is already growing discontent among Pakistan’s economic community about the ramifications of the tax increases announced by the government earlier this week, and political analysts expressing concern that the tax increases came at the behest of the US Treasury Department. Yet Pakistan has more to answer to than just its critics, as the Obama Administration is still making demands on them to change economic policies. Now, Secretary of State Hillary Clinton has chimed in, demanding that the Zardari government increase taxes on “the very well off” in Pakistan and increase spending on health care and education.
Is it the US State Department’s job to dictate the tax rates of foreign nations? Secretary Clinton certainly seems to think so, insisting that Pakistan’s upper class “do not pay their fair share.”
Adding to concerns, Pakistan’s Finance Minister Shaukat Tarin tendered his resignation this week, though the government insists this had nothing to do with disagreements over policy. Still, it adds to the uncertainty in a nation already teetering on the brink of bankruptcy, and facing dramatic pressure from the US government, as well as the IMF, to dramatically increase their tax rates.
(Lets hope this government falls sooner rather than later, sustained by American misguided goodwill, then have elections, then a new government wholly different)
