We often find ourselves embroiled in bargaining with the vegetable seller for a minimal discount of 10 rupees or more. The vendor tries to save as much as he can to take back home and the customer intends to compensate himself/herself for the increasing burden on the pocket.This burden mostly comprises of increased inflation and rate of taxes.
A tax is basically an amount taken from the wage earner's money in order to provide relief for the more needy ones. A bit like Robin Hood but in a legal manner. A fair tax system seeks to levy duty on the level of income i.e. the less privileged paying less than the ones earning better. Alas, this is not the case in our society. Pakistan follows a more regressive tax culture which overburdens the already opressed and allows the rich to get richer with little or no accountability on non filing of tax.
The origin of tax can be traced centuries back. The Europeans, Arabs and Mughals all have used taxes as a sole means to distribute income more fairly in the society. However, the ruling elites have, more often than not, been blamed of using this system to their advantage by creating an increased class divide. At present, the same tradition continues where the middle and lower class are burdened to fill the goverment's treasury.
Pakistan has had a history of lawmakers abusing power for their vested interests instead of genuinely working to build a strong society. FBR and the legal system have failed to protect the rights of the common man by repeatedly favouring the rich and powerful and allowing the tax discrepancies to presist. We have tax laid on practically every object. Be it basic commodities like food, water and electricity or even on necessities like medicine and hospitalization. House tax, GST and multiple other direct and indirect taxes have made survival nearly impossible for the ones already living on the edge. The white collared people are struggling to save their prestige and the blessed elites are no where near in feeling the pinch. The present PTI government did promise a more fair tax culture but that has not been achieved so far.
Our country is in dire need of a fair and progressive tax environment to uplift the economy and make it stand tall on its feet. We must wade through the tax structures of China and the US to gain an insight into successful and fair tax reforms and determine them as foundation pillars on which a strong and stable economic system can prosper. Pakistan also needs to develope a stronger middle class, a backbone of any developed economy to positively generate tax revenues which can in turn benefit the economy as a whole by not only protecting the poor of extreme poverty but also curbing unemployment and improving the infrastructure.
PM Imran Khan often speaks about making Pakistan more in line with Islamic policies but without a legitimate and proper tax culture, this idea may seem a little far fetched.