INCREASE TAX NOT THE TAX NET - Printable Version

INCREASE TAX NOT THE TAX NET - Printable Version

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INCREASE TAX NOT THE TAX NET - javed - 07-27-2005

According to Daily Business Recorder Karachi the CBR is going to launch countrywide drive to broaden the tax base. This I do not know how many dozens times the people have in the past heard but instead always tax revenue was increased by imposing new or increasing direct or indirect taxes burdening the common man or those who already pay.

I am now 60 years with acute diabetic with resultant acute eye problem hence my inability to documentarily support my comments on this belated stage but I can solemnly affirm each and every word what I am going to narrate below holding Holy Quran in my hand.

Each and every Government keeps on alluring the people to help it by informing about tax evaders. Why the Government with its extensive network does not itself know is not a question here. Late 1980s one day the then Finance Minister Dr. Mehboobul Haq raised a similar slogan appealing the patriotic citizens to help. Foolishly my blood jumped up. I addressed two separately letters deliberately in shaky hand writing in Urdu posing myself as a semi literate shop keeper. I addressed these to two separate advertiserse whose advertisement as a box item every week end appeared in almost all newspapers. The text of these advertisements used to be our grand grand father was passing through the jungle. Seeing an injured old man he helped him and served for many days. The old man in return granted the grand grand father a 100% guaranteed cure natural herbal prescription for permanent cure of diabetic, cancer, infertality etc with a condition that this would be used for service of humanity and not for gain. Since then the family was dispensing this prescription free. I knew well the fact of this âfreeâ. I also knew how much it costs placing such advertisements and that too weekly hence my letter deliberately in shaky hand writing. As expected I got response from both on their printed letter heads. One responding âBaba Jeeâ eve had his fax number on the letter head whereas in those Fax had not come even in PCOs. One quoted âHadiyaâ of his family prescription at Rs. 10,000 and the other at Rs. 13,000/-. This was only costs of materials and herbs used while labour was free from the family and these rates were likely to be increased. Both quoted me that daily more than 10 to 20 people get cure from these prescriptions.

At that taxable income was at Rs. 40,000/-. Taking addresses from the telephone directory I addressed every commissioner and appellate commissioner of income tax in Lahore with a specific request to investigate if these two Baba Jees were pay income tax in proportion to Rs. 13,000 per patient by 15 patient a day. No one as usual gave me response. After lot of reminders I addressed Islamabad when a P.S to Commissioner Income Tax Lahore responded me in about a year that one advertiser has closed his business now and the other had shifted to Rawalpindi. Thus the income tax in fact ignored the real issue and tried to fool me. I again wrote to this P.S that the point raised was not if the business was today closed or one had gone to Rawalpidi. My question was when one was doing business in Lahore before shifting to Rawalpindi and other before closing the business had the area income tax inspector/officer receiving income tax in proportion to business of these two. No further reply came till came Nawaz Sharif who raised the similar slogan appealing citizens to inform him about tax evasion. When I addressed him came a response from an income tax officer of Rawalpindi area advising me to submit proof that said two advertisers had not been paying income tax properly. People were being advised to inform about tax evadors but they were also supposed to prove it. In simple words it means when government requests the public to inform about some absconder or criminal the public must also then arrest the absconder and prove the criminal activities. I then understood the whole game and worth of such appeals of the authorities.

Here my memories are fading but it was perhaps about 5 years back when once again slogan of increasing the tax base was raised that I addressed a similar letter to a another advertiser. He quoted me about same Hadiya (approx) Rs. 12,000 which was cost of input material only. This time keeping in view my previous experience I avoided writing to income tax and wrote directly by name to the then Chairman CBR with the same plea namely if advertiser was paying income tax to the tune of his âhadiyaâ per patient. Till today I have not got any response. However, hold your breath and if you wish I can hold Holy Quran in my hands â within three weeks of my writing to Chairman CBR I got a letter from the same advertiser which read âwe thought you are a good man but you areâ¦.â. In the dotted line were the words which this space cannot afford. I did not read that letter any further and I did not posses it now by it is engraved on my mind.

There are hundreds of new avenues for increasing tax revenue and same time giving tax relief to common man on items like medicines, oil, daily kitchen consumables etc but these new avenues are deliberately avoided eg no tax on real estate just for the benefit of big. For example brining under the net tax the fortune tellers, miracle curers, within hours returning oneâs youth, providing child birth to infertile can bring about 1/4th of targeted tax revenues as clients of these people are wealthy people. Their annual incomes can well be imagined keeping in view the volume of costly weekly newspaper advertisements, too costly digests advertisements, number of employees engaged by them on distribution of their pamphlets on bus stops etc.

- Goodman - 07-30-2005

Dear Javed sahib

Your actions were individuals. Could you name just one economy in the history of mankind, who managed to got to the correct tax net by these type of appeals from the Governments and individual actions of people like yourself. If there was one please add to my knowledge.

Despite your health you took time to write and nobody had the decency to write you back thanking for the effort.

What does it all tell us
1. The Government does not know how to implement an effective and efficient tax structure. Hence there is no institutional setup to catch tax evaders. There is a setup (CBR) to collect tax but nobody is there to implement tax legislation. Its all self assessment without any checks and balances. If you think CBR is implementing the legislation then let me tell you there are 150 million people in pakistan, only 1.2 million pay tax and only 30000 tax payers declare their income to be more than 150,000 per year.

2. In the absence of any institutional setup, people like you and me try to play our part by responding to Govt appeals. Instead we should be slamming the Govts to either put up with the challenge or shut up.

3. Over and over again it has been pointed out that the intervention in the democratic process is leading the country nationally insecure. Intervention coupled with the self esteemed religious elements in the coutry pose a very clear and continual danger to our national security and needs tackling at once. I dont know how many experiences does these factions need to realise what they are doing is wrong. On average one diplomatic mistake is made per week but who is to question them.

You are elder and senior to me, I wont be suggesting anything but would like to mention that the best individual effort we can all make is to help real democracy (REAL DEMOCRACY) take roots. I think thats the best we can passs on to next generation.

I wish you well and good health.

- ehson - 08-05-2005

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by Goodman
 
You are elder and senior to me, I wont be suggesting anything but would like to mention that the best individual effort we can all make is to help real democracy (REAL DEMOCRACY) take roots. I think thats the best we can passs on to next generation.

I wish you well and good health.
<hr height="1" noshade id="quote"></blockquote id="quote">
I asume that both of the above poster are elder and senior than I. I therefore wont be suggesting anything but would like the mention that the best individual effort one can make is the help the Caliphate. The only system which has proven to be perfect and transparent.
May Allah(swt) bless us all.

- Goodman - 08-05-2005

Dear Ehson

You call me elder You blasphemous person, though I am not a 7 days regular Gym goer, but when I do go I aim to talk dinner out to as many girls as I reasonably and practically can and I do succeed... Strange but true.

Anyway, Your coneption is correct. Anything which is real democracy is desirable. Now what is a real democracy is a long long subject.

- ehson - 08-10-2005

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by Goodman
 Dear Ehson

You call me elder You blasphemous person, though I am not a 7 days regular Gym goer, but when I do go I aim to talk dinner out to as many girls as I reasonably and practically can and I do succeed... Strange but true.<hr height="1" noshade id="quote"></blockquote id="quote">sorry if i've steped on the sensitive line )

<blockquote id="quote">quote<hr height="1" noshade id="quote">Originally posted by GoodmanAnyway, Your coneption is correct. Anything which is real democracy is desirable. Now what is a real democracy is a long long subject.
<hr height="1" noshade id="quote"></blockquote id="quote">sounds like "lets not get into the real topic" ). I understand.