Tuesday, October 20, 2020

Pied Pipers led the country away from documented economy

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Adil Ghaffar
Adil Ghaffar
Experienced Chief Executive Officer with a demonstrated history of working in the financial services' industry. Skilled in Negotiation, Business Planning, Microsoft Word, Accounting, and Team Building. Strong business development professional with an ACA focused in Accounting and Finance from institute of chartered accountants of Pakistan. Contact: [email protected]
For all underdeveloped countries, including Pakistan, the main issue is the Documentation of economy. It is indeed an uphill task for any political government to motivate and drive its people towards documentation of economy. Normally in underdeveloped countries, dense population live in low stratum society with huge vote bank and Pakistan is not an exception.

 

In 1980’s, Pakistan steadily started to motivate its people towards documentation of economy which in 1990’s was carried by the political governments. Things were moving, though slowly, but in right direction till 2014.

 

In 2014, through Finance Act 2014, the then Government failed to establish its writ and conceded its defeat from informal economy and defined term Filer in the Income Tax Ordinance. The inclusion of term Filer in the Income Tax Ordinance basically describes the incapacity and incapability of people sitting in Federal Board of Revenue (FBR).

 

FBR, in other words, acknowledged that over the years it has failed not only to meet the modern days technology but also the human resources.

 

What has to say more about bureaucratic and political system. The then Political government, in its eagerness to collect revenues, by whatever means, has tarnished, culminated and stigmatized all efforts since inception towards documentation of economy.

 

Government of Pakistan at present and was accumulating revenues through the indirect taxation and contribution from indirect taxes is and was always higher than the direct taxes.

 

Pakistan, once steadily paraded towards standalone state. Then some adventurous nature Pied Pipers with their unproven narratives led the country away from achieving financial goals.

 

Due to these experiences, instead of pursuing on a documented economy, the state stuck further into the economic chaos. The policies once made for the documentation of economy now seems a shadow to hold.

 

Defining filer in Income Tax Ordinance

 

Defining filer in Income Tax Ordinance is basically describing non-filers. Accepting non-filers is equivalent to surrendering them and compromising writ of the Government. For this compromise and treachery, which derailed Pakistan from entering in modern era, those financial engineers be brought to task and should be testified under treason clause.

 

Present regime, in its effort to recognise and bring non-tax filers towards the basic objective of documentation of economy, of an under developed country, facing unadorned criticism, which was earlier absorbed by the governments, over a time period between 1980 to 2014.

 

Naturally, in a country where only 1.5 million people are in direct tax net out of more then 220m people, hardships and severe criticism alongwith challenges will have to be borne by the government. This decision of 2014 has put Pakistan 34 years behind and now government has to strive vigorously to attain that level of documentation of economy which Pakistan enjoyed pre-2014.

 

Tax disparity between filers and non-tax filer

 

Lot of damage has been done, present regime should now slowly and gradually start the process again and tax disparity between filers and non-tax filers be reduced and brought back to zero so that those non-tax filers who are currently in system and following documentation of economy should not be shied away.

 

FBR need young blood

 

Present regime, should simultaneously start revamping of FBR by recruiting young blood, followed by huge investments in IT infrastructure and on development of human resource be made to bring these non-tax filers in tax net.

Adil Ghaffar
Adil Ghaffar
Experienced Chief Executive Officer with a demonstrated history of working in the financial services' industry. Skilled in Negotiation, Business Planning, Microsoft Word, Accounting, and Team Building. Strong business development professional with an ACA focused in Accounting and Finance from institute of chartered accountants of Pakistan. Contact: [email protected]

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