Bad tax policies have histori­cally curbed economic growth and development. Rather than carefully developing such poli­cies with an adequate legal ba­sis, the hunger for revenue leads to more and more tax measures being added without considering their consequences for the econ­omy. Recognizing the weakness of tax administration, withholding income taxes have been applied to all manner of transactions such as utility bills, school fees, bank transactions, and telephone bills. Businesses, utilities, banks, and even schools have become tax col­lection agencies, adding to their costs of doing business.

Unfortunately, in Pakistan, suc­cessive governments have used taxes as a tool to extort as much as possible from the masses for their own comforts and luxuries. By re­sorting to repressive tax laws, they have been making the rich rich­er and the poor poorer, stifling growth, and discouraging busi­ness transactions through com­plex laws and cumbersome pro­cedures. Our financial managers are caught in a dilemma. On one hand, there is mounting pressure to reduce the fiscal deficit through improved collections, and on the other, they are not ready to abol­ish numerous tax exemptions and concessions available to the rich and powerful. In our fiscal woes, there is also criminal culpabil­ity of IMF bosses who pressure our economic managers to follow their faulty prescriptions. They advocate for more regressive taxes and do not care if the federal gov­ernment raises the sales tax rate, knowing that such actions bur­den the poor and constitute open violations of Articles 77 and 162 of the Constitution of Pakistan. In their countries, they talk about the rule of law, but in Pakistan, they ignore our supreme law.

Over time, our tax system has become rotten, oppressive, unjust, and target-oriented. We should liberate ourselves from the re­form game of the World Bank and other foreign donors. The tax pol­icies implemented at the behest of foreign donors have led to ab­ject poverty for the vast majority of people. These policies are not making us self-reliant but are de­stroying our industry and busi­nesses. If we manage to formulate a rational tax policy through pub­lic debate and the parliamentary process, and implement it through consensus rather than coercive measures, there is every possibili­ty of getting rid of the World Bank and IMF in a short span of time.

SHAFI AHMED KHOWAJA,

Hyderabad.