According to finance Minister the excercise was based on staration of
At long last, a beginning was made on Saturday last towards long
overdue exercise of documentation of national economy when the present government launched
a nation wide tax survey in 13 main cities of the country amid threats from some leaders
of the business community to resist the official campaign to broaden the tax base and
unearthing the tax-evaders.
the strike was observed by traders in different cities to protest
against the government's measures to boost revenues. The survey teams did not force
anybody to open their shutters and decided to wait till the traders return to their shops.
"We are in no hurry let them keep their shops closed as long as they wish. The day
they open their shops they will have to receive the survey form and fill it in the
stipulated time" an official of the CBR commented.
The main features of the government's documentation drive and sales tax
regime were finally announced by the Finance Minister at a press conference. The
justification of such an exercise, according to the Finance Minister was based on
starvation of resources. Debt servicing alone consumed more than 55 per cent of the
budgetary expenditures. On the external front, the country had to face difficult
conditions to secure foreign funding and the risk of constant default which could
undermine national sovereignty. The Finance Minister also acknowledged that the government
and its tax collecting machinery were also to be blamed for the present state of affairs.
The tax regime was plagued by numerous afflictions including multiplicity of taxes,
cumbersome assessment procedures, inefficiency in tax administration, inequality and tax
exemptions widespread delays in resolution of disputes and outright corruption. These
problems had led to a large growth in the underground economy, estimated somewhere between
to about two-third of GDP. It was essential to straighten out these weaknesses along with
measures against those who were deliberately evading taxes or taking undue advantage of
some lacunae in laws.
The financial experts were of the opinion that Pakistan could not
afford to delay the proposed reforms of the present regime aimed at reducing the country's
crippling fiscal deficit in line with the advice of the International Monetary Fund (IMF).
Currently an IMF mission is in Pakistan. The country is seeking a three-year 2.5 billion
credit line from the fund for its poverty alleviation and economic growth programme. In
order to win the confidence of visiting IMF mission, the government will have no other
choice but to expand tax base to generate more revenue and stabilize national economy. It
was the long-standing demand of the Britton Wood institution to extend GST to grass root
levels but at present it is in our interest to generate revenue from our indigenous
resources. Gone are the days when the country survived despite tax evasion, plundering of
national wealth, embezzlement of funds. Now every person will have to pay his due share to
put the economy on way to prosperity and development.
It is hard luck of the country that only 1.2 million people out of the
total population of 140 million are paying taxes. The government is justified to bring
three million traders in tax net and launching national tax survey to unearth untaxed
assets. This would have long-term impacts on national economy, which would not only
compensate previous governments' negligence on taxation issues but it will also explore
new prospect of revenue generation. It would help government in generating more revenue on
permanent basis by netting millions of people in tax circle. Similarly, tax survey would
pave the way for documentation of national economy by forcing elite class to declore their
assets and pay their due share in national development. The government drive would provide
a sigh of relief to the existing taxpayers as they were compelled to bear overall burden
The present regime deserves a pat for its commitment to promote tax
culture in the country despite desperate bid by the vested interests in the business and
trade sector to persist with immoral tendency of tax evasion. It's, however, a matter of
satisfaction that the launching of the tax survey and documentation drive has proceeded
peacefully and smoothly as the CBR officials, backed by army personnel, handed over
thousands of prescribed forms in the shopping centres and posh centres and posh
residential areas. The overall response of co-operation, enthusiasm and willingness in the
chosen cities, as reported officially was encouraging, though some unscrupulous elements,
deceiving the national exchequer to the tune of rupees three to six billion annually
through tax evasion, did shamelessly incite fellow shopkeepers to shutdown for undermining
the process, which is so fundamental to the economic revival. There exists a general
recognition of the fact that the tax survey and documentation drive is vital for economic
recovery, which, in turn, will free the nation from international monetary institutions'
domination. It is , therefore, hoped that the resistance against the drive will die down
with the passage of time paving way for a disciplined, civilised and nationalistic
behaviour on the part of all concerned. As declared by Chief Executive Gen. Pervez
Musharraf and other state functionaries however, no one should entertain any illusion
about government's determination to enforce economy's documentation and expansion of the
tax net. It is time for the business and trade community to accept the national realities
and to refuse to blindly follow its leaders, who are, in fact, scared of the documentation
and expansion of the tax net.