The poor subsidise the rich in Pakistan

Waseem

Moderator
Staff member
Tuesday, July 20, 2010

Average worth of Pak MPs is $900,000 but only a few pay income tax

ISLAMABAD: Much of Pakistans capital city looks like a rich Los Angeles suburb, says a report published in New York Times. Shiny sport utility vehicles purr down gated driveways. Elegant multistory homes are tended by servants. Laundry is never hung out to dry.

But behind the opulence lurks a troubling fact. Very few of these households pay income tax. That is mostly because the politicians who make the rules are also the countrys richest citizens, and are skilled at finding ways to exempt themselves.

That would be a problem in any country. But in Pakistan, the lack of a workable tax system feeds something more menacing: a festering inequality in Pakistani society, where the wealth of its most powerful members is never redistributed or put to use for public good. That is creating conditions that have helpedspread an insurgency that is tormenting the country and complicating American policy in the region.

It is also a sorry performance for a country that is among the largest recipients of American aid, payments of billions of dollars that prop up the countrys finances and are meant to help its leaders fight the insurgency. Though the authorities have tried to expand the net in recent years, taxing profits from the stock market and real estate, entire swaths of the economy, like agriculture, a major moneymaker for the elite, remain untaxed.

This is a system of the elite, by the elite and for the elite, said Riyaz Hussain Naqvi, a retired government official who worked in tax collection for 38 years. It is a skewed system in which the poor man subsidizes the rich man. While Pakistans income from taxes last year was the lowest in the countrys history, according to Zafar ul-Majeed, a senior official in the Federal Board of Revenue, the assets of current members of Parliament nearly doubled from those of members of the previous Parliament, the institute study found. The countrys top opposition leader, Nawaz Sharif, reported that he paid no personal income tax for three years ending in 2007 in public documents he filed with Pakistans election commission. A spokesman for Mr. Sharif, an industrialist who is widely believed to be a millionaire, said he had been in exile and had turned over positions in his companies to relatives. Taxes are the Achilles heel of Pakistani politicians, said Jahangir Tareen, a businessman and member of Parliament who is trying to put taxes on the public agenda. .He paid $225,534 in income tax in 2009, a figure he made public in Parliament last monthIf you dont have income, fine, but then dont go and get into a Land Cruiser. The rules say that anyone who earns more than $3,488 a year must pay income tax, but few do. Akbar Zaidi, a Karachi-based political economist with the Carnegie Endowment, estimates that as many as 10 million Pakistanis should be paying income tax, far more than the 2.5 million who are registered. Out of more than 170 million Pakistanis, fewer than 2 percent pay income tax, making Pakistans revenue from taxes among the lowest in the world, a notch below Sierra Leones as a ratio of tax to gross domestic product.

In this country, no one asks, How did you get that flat in Mayfair? said Shabbar Zaidi, a partner at A. F. Ferguson & Company, an accounting firm in Karachi, referring to an affluent area of London. Its a very good country for the rich man. Chauffeurs, servants, big houses. The question is, who is suffering? The common man. Tareen, the member of parliament, said when he first tried to pay, tax collectors refused to take the money, not wanting to rock the boat. He had to write a letter to a senior official to have it accepted. It was not always like this. Nasir Aslam Zahid, a former Supreme Court justice in his 70s, blames what he calls moral decay in Pakistani society, in which respect for rules has fallen, merit has been forgotten and cheating has become a way of life. In my time, it was considered a moral thing for a person to file a tax return, he said. Today, corruption has broken all records.

Source
 

sarbakaf

Siasat.pk - Blogger
bhai jaan
we know all that question is what as AAWAM are we doing to stop these practices ?
if we are not doing any thing do we have a right to shout and cry ?
 
I agree that we all should pay income taxes but I dont liek the way this thread is written. The author is trying to single out Pakistan and it smells of Anti-Pakistaniyat which I do not like. For your information, the awaam of Saudi Arabia, Bahrain, Oman, Qatar, Bahrain, Kuwait and many others do not pay any income taxes either and never have. They dont even pay sales taxes wihch all Pakistani's pay frmo rich to poor....so the way this article is written is as if it is singling out Pakistan for the crime of the century...relax beta...we have to pay taxes but the problem is the system of checks and balances not the awaam or the rich. make the accountability better and the rich will pay taxes too.
 

QaiserMirza

Chief Minister (5k+ posts)
No taxes by Pakistani elites

Much of Pakistan's capital city looks like a rich Los Angeles suburb. Shiny sport utility vehicles purr down gated driveways. Elegant multistory homes are tended by servants. Laundry is never hung out to dry.


But behind the opulence lurks a troubling fact. Very few of these households pay income tax. That is mostly because the politicians who make the rules are also the countrys richest citizens, and are skilled at finding ways to exempt themselves.

That would be a problem in any country. But in Pakistan, the lack of a workable tax system feeds something more menacing: a festering inequality in Pakistani society, where the wealth of its most powerful members is never redistributed or put to use for public good. That is creating conditions that have helped spread an insurgency that is tormenting the country and complicating American policy in the region.

It is also a sorry performance for a country that is among the largest recipients of American aid, payments of billions of dollars that prop up the countrys finances and are meant to help its leaders fight the insurgency.

Though the authorities have tried to expand the net in recent years, taxing profits from the stock market and real estate, entire swaths of the economy, like agriculture, a major moneymaker for the elite, remain untaxed.
This is a system of the elite, by the elite and for the elite, said Riyaz Hussain Naqvi, a retired government official who worked in tax collection for 38 years. It is a skewed system in which the poor man subsidizes the rich man.

The problem starts at the top. The average worth of Pakistani members of Parliament is $900,000, with its richest member topping $37 million, according to a December study by the Pakistan Institute of Legislative Development and Transparency in Islamabad.

While Pakistans income from taxes last year was the lowest in the countrys history, according to Zafar ul-Majeed, a senior official in the Federal Board of Revenue, the assets of current members of Parliament nearly doubled from those of members of the previous Parliament, the institute study found.

The countrys top opposition leader,Nawaz Sharif, reported that he paid no personal income tax for three years ending in 2007 in public documents he filed with Pakistans election commission. A spokesman for Mr. Sharif, an industrialist who is widely believed to be a millionaire, said he had been in exile and had turned over positions in his companies to relatives.

A month of requests for similar documents for Pakistans president and prime minister went unanswered by the commission; representatives for the men said they did not have the figures.
Taxes are the Achilles heel of Pakistani politicians, said Jahangir Tareen, a businessman and member of Parliament who is trying to put taxes on the public agenda. He paid $225,534 in income tax in 2009, a figure he made public in Parliament last month. If you dont have income, fine, but then dont go and get into a Land Cruiser.

The rules say that anyone who earns more than $3,488 a year must pay income tax, but few do. Akbar Zaidi, a Karachi-based political economist with the Carnegie Endowment, estimates that as many as 10 million Pakistanis should be paying income tax, far more than the 2.5 million who are registered.

Out of more than 170 million Pakistanis, fewer than 2 percent pay income tax, making Pakistans revenue from taxes among the lowest in the world, a notch below Sierra Leones as a ratio of tax to gross domestic product.

Mr. Zaidi blames the United States and its perpetual bailouts of Pakistan for the minuscule tax revenues from rich and poor alike. The Americans should say: Enough. Sort it out yourselves. Get your house in order first, he argued. But you are cowards. You are afraid to take that chance.

Much of the tax avoidance, especially by the wealthy, is legal. Under a 1990s law that has become one of the main tools to legalize undocumented or illegally obtained money made in Pakistan, authorities here are not allowed to question money transferred from abroad. Businessmen and politicians channel billions of rupees through Dubai back to Pakistan, no questions asked.

In this country, no one asks, How did you get that flat in Mayfair? said Shabbar Zaidi, a partner at A. F. Ferguson & Company, an accounting firm in Karachi, referring to an affluent area of London. Its a very good country for the rich man. Chauffeurs, servants, big houses. The question is, who is suffering? The common man.



article by new york times

Our leaders will not stop their corruption, will not stop begging from other countries and we just continue to be the silent lambs.
God give us the strength to wake up and sort ourselves out.
Totally agreed that our democracy is of the elite and powerful, by the elite and powerful & for the elite & powerful.
 

QaiserMirza

Chief Minister (5k+ posts)
No taxes by Pakistani elites

Much of Pakistan's capital city looks like a rich Los Angeles suburb. Shiny sport utility vehicles purr down gated driveways. Elegant multistory homes are tended by servants. Laundry is never hung out to dry.


But behind the opulence lurks a troubling fact. Very few of these households pay income tax. That is mostly because the politicians who make the rules are also the countrys richest citizens, and are skilled at finding ways to exempt themselves.

That would be a problem in any country. But in Pakistan, the lack of a workable tax system feeds something more menacing: a festering inequality in Pakistani society, where the wealth of its most powerful members is never redistributed or put to use for public good. That is creating conditions that have helped spread an insurgency that is tormenting the country and complicating American policy in the region.

It is also a sorry performance for a country that is among the largest recipients of American aid, payments of billions of dollars that prop up the countrys finances and are meant to help its leaders fight the insurgency.

Though the authorities have tried to expand the net in recent years, taxing profits from the stock market and real estate, entire swaths of the economy, like agriculture, a major moneymaker for the elite, remain untaxed.
This is a system of the elite, by the elite and for the elite, said Riyaz Hussain Naqvi, a retired government official who worked in tax collection for 38 years. It is a skewed system in which the poor man subsidizes the rich man.

The problem starts at the top. The average worth of Pakistani members of Parliament is $900,000, with its richest member topping $37 million, according to a December study by the Pakistan Institute of Legislative Development and Transparency in Islamabad.

While Pakistans income from taxes last year was the lowest in the countrys history, according to Zafar ul-Majeed, a senior official in the Federal Board of Revenue, the assets of current members of Parliament nearly doubled from those of members of the previous Parliament, the institute study found.

The countrys top opposition leader,Nawaz Sharif, reported that he paid no personal income tax for three years ending in 2007 in public documents he filed with Pakistans election commission. A spokesman for Mr. Sharif, an industrialist who is widely believed to be a millionaire, said he had been in exile and had turned over positions in his companies to relatives.

A month of requests for similar documents for Pakistans president and prime minister went unanswered by the commission; representatives for the men said they did not have the figures.
Taxes are the Achilles heel of Pakistani politicians, said Jahangir Tareen, a businessman and member of Parliament who is trying to put taxes on the public agenda. He paid $225,534 in income tax in 2009, a figure he made public in Parliament last month. If you dont have income, fine, but then dont go and get into a Land Cruiser.

The rules say that anyone who earns more than $3,488 a year must pay income tax, but few do. Akbar Zaidi, a Karachi-based political economist with the Carnegie Endowment, estimates that as many as 10 million Pakistanis should be paying income tax, far more than the 2.5 million who are registered.

Out of more than 170 million Pakistanis, fewer than 2 percent pay income tax, making Pakistans revenue from taxes among the lowest in the world, a notch below Sierra Leones as a ratio of tax to gross domestic product.

Mr. Zaidi blames the United States and its perpetual bailouts of Pakistan for the minuscule tax revenues from rich and poor alike. The Americans should say: Enough. Sort it out yourselves. Get your house in order first, he argued. But you are cowards. You are afraid to take that chance.

Much of the tax avoidance, especially by the wealthy, is legal. Under a 1990s law that has become one of the main tools to legalize undocumented or illegally obtained money made in Pakistan, authorities here are not allowed to question money transferred from abroad. Businessmen and politicians channel billions of rupees through Dubai back to Pakistan, no questions asked.

In this country, no one asks, How did you get that flat in Mayfair? said Shabbar Zaidi, a partner at A. F. Ferguson & Company, an accounting firm in Karachi, referring to an affluent area of London. Its a very good country for the rich man. Chauffeurs, servants, big houses. The question is, who is suffering? The common man.



article by new york times

Our leaders will not stop their corruption, will not stop begging from other countries and we just continue to be the silent lambs.
God give us the strength to wake up and sort ourselves out.
Totally agreed that our democracy is of the elite and powerful, by the elite and powerful & for the elite & powerful.