Tax evasion
October 5th, 2012
There are times when the audacity and mismatch between what is being said and what is being done leaves us all dumbfounded. Recently, the National Database and Registration Authority completed an exercise aimed at identifying those individuals who have lifestyles of opulence and luxury yet pay no taxes. The results strain credulity, in a country where credulity is already in short supply. Tens of thousands of people live in posh areas of big cities, own luxury cars, engage in lucrative professions such as medicine and law and possess licenses for weapons — yet they pay no taxes. Over a million and a half people travel abroad multiple times in a year, and more than half a million people own multiple bank accounts without being registered as tax payers.
The numbers may not be very large in proportion to the overall population, but the audacity of living in this manner without paying taxes, and in many cases without even being registered with the tax authorities, is confounding even for Pakistan. We all knew these numbers would be large when they came in, but we weren’t prepared for how large and how audacious the picture of tax evasion in Pakistan really turned out to be. This would be just another data release were it not for the timing. Nadra’s disclosures come only days after the announcement of another ‘tax amnesty scheme’, the purported intent of which is to bring evaded wealth into the tax net. Past schemes of this sort have had as much success as de-weaponisation drives in conflict areas.
Pakistan has one of the highest cash-to-bank deposit ratios in the world, which basically means that Pakistanis prefer holding their wealth in cash, and prefer to execute their transactions in cash rather than use banking channels. The reason is obvious: cash transactions are difficult to trace. The volume of money that circulates in the cash economy in Pakistan is larger than it is in most other countries of the world. Bringing this money into the tax net, a fact whose importance and urgency has been highlighted by the numbers compiled by Nadra, will not happen with more ‘amnesty’ schemes. It will happen when there is a will to connect the dots and identify the evaders on the part of the Federal Board of Revenue, when there is a will to document commercial transactions through a value-added tax, and above all, when there is a will on the part of citizens to change their mindset and carry their part of the burden to pay for their state’s expenses.
A rock and a hard place
October 5th, 2012
The killing of Abdul Haq Baloch, who reported for a private television network, in Khuzdar on Saturday has highlighted yet again the increasingly dangerous terrain that the country’s journalists must negotiate in the line of duty, particularly in conflict-hit areas such as Balochistan and the north-western parts of the country. Mr Baloch was only about 100 yards from the local press club when he was gunned down by masked men. As in so many similar cases, the killers fled and the police case has been registered against “unidentified gunmen”. The list of those who could be behind the attack can potentially include elements ranging from militants or separatists to sections of the law-enforcement apparatus, for journalists who report from the country’s trouble spots complain of facing pressure from both sides in relation to their work. Over the years, a mounting body of information suggests that amongst the persecutors of reporters could be elements within state-sponsored agencies that seek to suppress the flow of information and place impediments in the path of citizens’ right to information — the death of Saleem Shahzad being a case in point. In such a situation, where the state makes little effort to even signal its support for journalists, honest reportage can be considered under threat.
Will Mr Baloch’s killers ever be brought to book? Given the state’s history in this regard, this would appear unlikely. Earlier during the year, the New York-based Committee to Protect Journalists warned that “deadly, unpunished violence against the press rose sharply” in Pakistan, and the country’s rating on the CPJ Impunity Index worsened for the fourth year in a row. In this bald statement can be found the truth of the matter. The index rates countries where journalists are killed regularly but the government usually fails to solve the crime. In other words, Pakistan is a deadly country for journalists not just because they are threatened, but also because the state consistently refuses to pursue the persecutors in any meaningful fashion. Unless this pattern changes, there is danger that those in the media, particularly in conflict-hit areas, will have to work with so much circumspection as to render themselves impotent.
Aviation safety
October 5th, 2012
The state’s machinery is not exactly known for its clockwork efficiency. But when it comes to investigating Pakistan’s worst air disasters, the government needs to show some urgency. As reported in this paper the Safety Investigation Board, which works under the Ministry of Defence and is investigating April’s Bhoja Air crash on the outskirts of Islamabad, has not met for two months. The reason for this is that the investigation chief is on sick leave while another investigator has retired. The SIB is also waiting for the International Civil Aviation Organisation’s feedback, as the global agency is looking into the crash as well. Meanwhile, the probe into July 2010’s Airblue crash, in Islamabad’s Margalla hills, is also proceeding at a snail’s pace. Earlier this year the Peshawar High Court ordered a re-investigation into the tragedy as it was dissatisfied with the official probe. Reportedly, in the Airblue investigation as well a response from the ICAO is awaited.
If it is indeed a lack of feedback from foreign experts that is holding up both investigations, perhaps the local authorities need to approach the ICAO and request it to update them on the findings thus far. However, delaying a probe because an investigator is indisposed or has retired is simply unacceptable. Surely the state can appoint competent experts in their place. The government needs to show urgency and interest in both probes for two key reasons: first, there is a need to ascertain what exactly brought down the two airliners so that rectifications can be made where safety protocols are concerned in order to prevent future accidents. Second, the investigations need to progress at a satisfactory pace so that the heirs of the victims can be duly compensated. Overall, the state needs to urgently review its lethargic attitude towards aviation safety standards in Pakistan.