The IMF wants Pakistan to tax its rich elite, so did former US Secretary of State Hillary Clinton and present PM of UK and many vocal members of the House of Commons, but all this falls on deaf ears. Our elite class, the paid civil and khaki bureaucracy and political elite, which forms less than two percent of our population, seem to hear only what is beneficial for them. After promising to break the ‘Begging Bowl’ the first thing PML-N did was ask IMF for a loan, what is wrong with us? There were millions of ways of coming up with the money if they had really wanted a better Pakistan.

Whether it is the military government of Zia and Musharraf, or elected civilian political government of PPP, which never tires of claiming to be champions of poor, they are all united in relying upon indirect taxation. The recent budget presented by PML-N relies primarily on indirect taxes. Everybody in this country talks about a free market economy, but they all forget that capitalist economic system maintains a balance of sorts by raising taxes from all sources of income, with quantum of taxation coming from direct taxes recovered from those in highest earning bracket and the state than utilises these funds for the welfare of most deprived.

It is tax money which is used to develop human resources through subsidised education and health, provide skilled manpower to run industries, invest in research and development, provide justice and security for all citizens and maintains a healthy balance between the haves and have-nots, so that harmony exists within society. In a free market economy, profits generated from real estate, stock exchange, retail trade, sale of agriculture produce are taxed at same uniform rate as paid by salaried class, with taxation rate rising proportionately as the income bracket rises. Direct taxation arrests inflation, helps to boost the Tax to GDP ratio to an acceptable level, while indirect taxation is a burden on the poor and acts as a catalyst for inflation.

Yet the political and paid establishment of this country would have the state, focus on welfare of the elite, knowing that gap between rich and poor would widen to disastrous levels, providing a prefect breeding ground for terrorism and extremism to nurture, jeopardising our national security. The tragedy is that those who have benefited most from this country, knowing the negative impact of their policies, have shifted their assets and families to foreign countries.

How many other sovereign independent nations have their heads of states spending weekends on state expense in foreign countries, where their immediate family members live, or whose elite civil or khaki bureaucracy shift immediately after retirement?.


Lahore, July 14.