Withholding tax on banking transactions remains among the key issues facing the present government. Traders across the country have threatened agitation if the decision is not reversed by the government. There is evidence to suggest that the prime reason for NA-122 becoming a tough election for the ruling party was the aforementioned tax. The broader issue regarding the imposition of the tax is the issue of documentation of the economy. Repeated attempts to document the economy have led to failure and there is general disdain regarding the payment of taxes. The roots of this disdain are laid in the fact that the people in general consider the state as an external, foreign and alien entity, and unless and until this changes, nothing can change at a sustainable level vis-à-vis this issue.
It is important to understand and analyse this phenomenon if one wants to chalk out ways to build a sustainable and strong Pakistani state. The reasons in case of the three smaller provinces are somewhat similar but there are added dimensions because of them being the minor provinces. However, in the case of Punjab, the reason is solely the disdain and indifference of Punjabis from the entity known as the state.
To understand why this is so, one has to go into the roots of the development of this general psyche. In the case of Punjab, this psyche emerges from the history of the area, where one foreigner after another encroached upon the land. Once establishing their rule in Delhi, they would collect taxes from Punjab as a foreign entity. For it being a land comprising plains, the region had no natural defences and served as the entry route to the Indian market, which was a wealthy economy always inviting intruders. Punjabis, for their part, over the centuries, learnt that it is not in their interest to resist the invaders. So they would act pragmatic, and once the old order was replaced by the new order, would pay taxes to the new ruler. In return, they expected to have autonomy in their localised fiefdoms and expected law and order and security. But in their minds they always knew that the tax collector (the monarch or the empire) were foreign entities taking away their hard earned produce. Be it Afghans, Turks or Moguls, this is how the Punjabi heartland thought of the whole system of tax collection but, above all, of the whole system of the state.
When the Mogul Empire collapsed as a result of the assaults of Ahmad Shah Abdali, it left a power vacuum in Punjab, which was quickly filled by a unified movement comprising mostly of Sikhs but also supported by prominent local Muslim notables. Thus came the first indigenous Punjabi government in ages under Ranjit Singh. Ranjit Singh, unlike the popular perception in the Pakistani textbook narrative, had a good rein and created harmony in Punjab. But, as the latter events will reveal, even under him Punjabis could not consider the state as one of their own. And, for this reason, right after the death of the maharaja, Punjab got embroiled into an era of anarchy where the power struggle grasped the seat of government in Lahore but, more importantly, the sardars (heads) fought tooth and nail to protect and enhance their local fiefdoms. The era is known in folklore as sikhashahi (a Punjabi term for lawlessness). And then came the Brits who were foreign and resorted to the same foreigner system of tax collection in return for a localised autonomy to local eco-systems and offering protection and law and order. Punjabis thought of the Brits as foreign intruders but, being pragmatic as they were, they paid them taxes and gave them men to fight for them. But, of course, it was the ‘gora’s state’: an intruder, foreign, alien entity.
The real challenge emerged after the creation of Pakistan. Here came a state where the region could have its first experiment of being a true republic. Republic, by definition and through its genesis, is self-rule and sovereignty. For this experiment to function, the people had to consider themselves and the state as one and the same thing. But there has been a general reluctance in owning up to the state. Probably the imprint of centuries on Punjabi DNA has gotten so strong that they remain in search of a messiah (by definition an external entity) to come to their rescue. So, they hail Ayub, Bhutto, Benazir and Nawaz to come to their rescue and fix it for them. But they are not willing to take ownership of this state, which requires thinking of the state as an entity emerging from them. This is a big reason for the lack of tax collection, of derailing of constitutional governments and of the political fault lines in the country. Unless and until this is fixed, the state cannot emerge.
Now the question is how one can move forward to undo or circumvent this historical baggage that dominates Punjab’s evolutionary psychology? Well, the problem is economic and providing economic and business advisory is my bread and butter, so I cannot do it for free. Though one thing remains loud and clear: I am a Punjabi and a proud one.
The author can be reached on twitter at @aalimalik