Tax policies

Sir: Tax contributions and collections have remained such a difficult task in this deficit-hit country. The Federal Board of Revenue (FBR) has miserably failed to overhaul the systematically sick administration.

All the six-year-long efforts by the World Bank at the Tax Administration Reforms Programme have only made the administration more dysfunctional than it was ever before, as tax-to-GDP ratio has declined from over nine percent in 2011-12 to 8.50 percent in 2012-13. The major drawback of the tax policy is non-integration of the taxation environment. The existing poor infrastructure and lack of basic necessities like education, health, housing and inflated food items have made the people realise the futility of contributing to the taxation system.

Furthermore, the continuing appeasement policies in the form of loosening the grip over highly eligible taxpayers have deeply dented an already fragile national exchequer.

The concept of the broadened tax net and doing away with evasions, concessions and exemptions has remained vocal only through the voices of analysts. The policymakers have consistently shied away from undertaking any progressive reform for the benefit of the people at large and thorough development in the country.

The tool of SROs should have been employed for streamlining the administrative affairs, but unfortunately its use has remained manipulation of policies and targets.

This is very evident from frequent exercises of revision of targets downward for the last six months, which have also been not met by the FBR.

This dismal situation has not only handicapped the state’s resource distribution power but also taken the lives of the ordinary people at record high poverty levels.

The government, in cooperation with the FBR, should put its mind to maximising its resource generation capacity for the betterment of the economy to put overall economic indicators on a positive track.

Muhammad Azam Shaikh

Advocate, High Court, General Secretary,

Tax Bar Association