The Pakistan Human conditions Report 2002 paints a
ghastly picture of grave economic inequalities. According to the report
published by Centre for Research on Poverty Reduction and Income
Distribution about 50 per cent or 72 million of Pakistanis are living
below the poverty line. At least 6 million children between the age of 5
to 9 are out of school and about 55 per cent of the persons of 10 year
or over are illiterate.
In addition, the report shows an extremely
inequitable pattern of income distribution and tax burden. The top 20
per cent of the rich are sharing among themselves 50 per cent of the
income while 20 per cent of those at the bottom of the rung were getting
a miserly 6 per cent of the share.
While the gulf between in the income between the
richest and the poorest has widened, the poor segment of the society has
been burdened with increased taxation but it has been decreased for the
rich. The tax burden has registered an increase of 4 per cent for the
lowest income group while it has magnanimously been reduced by a 21 per
cent for the high income group.
In addition, the report says that changes in the
rates of taxes and duties have burdened the low income group profoundly
adding that it has primary benefited the high income group. During 1978
and 1988, the burden of taxes on the lowest income group increased to a
high 13 per cent and by 1998 it came to a high level of 3.8 per cent. On
the other hand, there was no increase in the tax burden on the highest
income group during 1987 and 1993 while by 2002 it actually registered a
significant decrease. The primary beneficiaries of the reduction in the
import duties have been manufacturers and producers while the expansion
of sales tax net resulted in prices of even those commodities used
mainly by the poor otherwise exempted from the sales tax.
The unjust income distribution and the inequitable
taxation have immensely burdened the middle and low-income groups while
it has provided an undue relief for those who don't really deserve it.
The most terrifying aspect of the indicators is that it proves that the
rich have benefited at the cost of the poor.
Over the years, the successive rulers proved that
they were not shy of increasing the tax burden, the primarily victim of
which was the poor. Ruler after ruler made it clear that collecting the
taxes and increasing the revenue was the top priority of the government
which cannot be challenged at any pretext. That explains the drastic
increase in prices of such basic commodities as petrol, gas,
electricity, flour, cooking oil, and all other kitchen items during the
last decade. In a country where 'good governance' has become a favourite
mantra, there are no signs yet of measures to make income distribution
and tax burden equitable. There are no visible attempts by the policy
makers to right the wrongs.
While the successive governments, be it quasi
democratic or military, have never been shy to squeeze taxes and
unabashedly as a 'right' they have never shown an interest to take
measures to lessen the taxes primarily aimed at the poor and not the
rich as they might have been. On the other hand, there have been no
attempts to cut the governmental expenditure the most glaring example of
which is the drastic increase in salaries of the top officials.
A week before the members of the provincial assembly
took oath, the Governor of Punjab magnanimously announced a hefty
increase in the salary of the elected members. The increase was made to
look natural as it was based on the recommendation of a five-member
committee comprising provincial secretaries and was only dome 'after
The salary of the member of assembly was increased
from Rs 4,500 to Rs 10,000 per month while the salary of advisor and
parliamentary secretary was fixed at Rs 30,000 and Rs 20,000 per month
respectively. There was a hefty increase in the salaries of the chief
minister, speaker, minister, deputy speaker and the opposition leader.
The monthly salary of chief minister was increased from Rs 21,000 to Rs
39,000 while that of the speaker went up from Rs 20,250 to Rs 37,000.
The salaries of the minister, deputy speaker and opposition leader were
increased from Rs 18,000 to Rs 35,000 each.
In addition, the speaker is allowed to use two
official cars maintained at the expense of the government throughout his
tenure of the office and for a period of 15 days thereafter. The speaker
is also entitled to a house rent of Rs 25,000 per month if official
residence is not available. The increase in the salary of the
legislators in Punjab alone will cost the exchequer billions every year
as the expenses for their airfares, accommodation, medical expenses,
telephone, cars, etc., etc., are also paid by taxes collected from the
people who can only dream of enjoying such facilities themselves.
With 1,157 elected representatives- 342 in the
National Assembly, 358 in the Punjab Assembly, 168 in the Sindh
Assembly, 124 in the NWFP Assembly, 65 in the Balochistan Assembly, and
100 in the Senate — the elections for which will be held shortly, the
pay increase to legislators, top judiciary and other top officials of
the government will cost the poor country in an arm and leg.
Are the claims to increase the revenue by burdening
the poor with heavy taxes without showing the least inclination to cut
the administrative expenses can be called justified? You have to answer
the question yourself.