When I was working in the petroleum industry, practically everyone I knew thought that I was taking bribes from contractors. So, when I started working part-time as a visiting lecturer and also as a contractor and told my department head about it, he was amazed. "This proves that what your colleagues say about you is false. If you were taking bribes, you wouldn't have to work part-time to make ends meet". Unfortunately, we have been conditioned to believe that most people working in government or in responsible positions are corrupt to the core. This is why I believe that the ex-army brigadier who committed suicide yesterday was innocent. The poor man had no choice because for many months, he had been subjected to inhumane treatment by officials who were "investigating" his non-existent crime. 
I can understand the humiliation he felt whenever the media announced his impending trial. Knowing Pakistanis well, he knew that none of his friends or relatives would ever believe he was not guilty. 
I believe there should be a law to prevent the reporting of such cases. Very often, an innocent man is condemned unheard after being subjected to a media trial. Those reporters and TV anchors who blow up such cases should be tried and sentenced to jail terms. This is the only way they will learn to be careful.

Mother of all U-turns: Why is PTI protecting tax evaders instead of punishing them?

By Shakir Lakhani Published March 12, 2019

If the government really wishes to increase tax revenue, all it has to do is to give a deadline to these businesses. PHOTO:FILE

I suppose we should have expected it, being used to so many U-turns by now. Asad Umar reversed a good tax-collecting measure introduced by the previous government, a measure that would have brought many tax criminals into the net. Instead, bowing to pressure from the powerful auto industry, he has allowed non-filers to buy vehicles of all sizes. Non-filers, it should be noted, do not pay income tax nor do they file tax returns. By law, they should be punished, instead they are allowed to pay just 0.6% tax on the amount they spend to buy property or vehicles, or when they withdraw more than Rs. 50,000 from banks. The good minister should have increased the tax to at least one percent, to be levied on all transactions, as well as reducing the allowable limit of withdrawing money to Rs. 10,000. But it seems that tax evaders can get away with anything and everything in this Islamic republic.
According to another report, the PTI government is thinking of an amnesty scheme to let tax thieves enjoy the fruits of their illegal activities. Another amnesty scheme? Has Imran Khan already forgotten what he said about amnesty schemes less than a year ago? Will this be the mother of all U-turns? Amnesty schemes allow money launderers to whiten their ill-gotten wealth, at the same time making honest taxpayers wonder why they should pay up to thirty percent tax on their incomes, when looters take advantage of amnesties and pay only two percent.
A day after Finance Minister Asad Umar presented the recent mini-budget, a national newspaper carried this poignant news item “As revenue shortfalls bite, PM beseeches business leaders to pay taxes”. “Beseech”, meaning “beg”? Why does Imran Khan have to beg businessmen to pay what they have to pay, as per the laws of the country? In any event, businessmen alone cannot be blamed for the revenue shortfall faced by the nation. All governments (including the present one) are responsible for our predicament. The reasons why we are a poor country are many, first and foremost being the blanket financial immunity given to smugglers, agriculturists, unscrupulous importers, traders and others to loot the country.
Smuggling has flourished ever since the 1960s, when “bara” markets in Landi Kotal and other towns were allowed to sell smuggled goods like cloth and electronic items on which no duty or taxes had been paid. In Karkhano Bazaar of Hayatabad in Peshawer, you can see smuggled goods flagrantly displayed in thousands of shops. I once asked a shop owner there if he’d ever paid income tax or sales tax. I’ll never forget how he laughed when he said, “No tax collector dares come here, he knows he won’t go back alive”. All Imran has to do is to order a crackdown on this and the “bara” markets in all cities, and collect billions in sales and income tax every year. But I doubt if he has the wisdom to do so, considering that almost all smugglers belong to the province which his party has been governing for the past six years.
The same goes for our feudal lords (the agriculturists), who are exempted from paying income tax at all, despite getting virtually free water, besides having huge loans written off every couple of years. The biggest crooks among them are the sugar barons who are easily able to get elected to our assemblies and use their power to go on looting the nation. A tax of Rs.20 per kilo of sugar can yield more than a hundred billion rupees every year, as sugar production in the country varies between five million to seven million tons.
Unscrupulous importers (in connivance with Customs officials) deprive the government of billions every year. In a recent case, a container bearing goods described as “old and used auto parts” was examined and found to contain cellphones, tablets, satellite and dish receivers, CCTV cameras, copper refrigerators tubes, ball bearings, circuit breakers, finger print scanners, and dialysis machines. If the container had not been examined, the importer would have got away with Rs. 60 million. There are thousands of such cases every year, which are either undetected or deliberately allowed to be cleared by the corrupt Customs officials. Even when someone is caught, he is only made to pay the duty and a token fine. In such cases, the FIA should investigate all previous imports by the offender and make him pay duties and heavy penalties on those consignments as well.
Imran says he may create a new tax collecting authority in place of the FBR. But has he ever thought of investigating why the FBR is not able to deliver? Two cases come to mind. Many years ago, the Chairman FBR set up a team to monitor the sales of a famous market in Lahore. The shopkeepers became suspicious when they saw members of the team taking notes on the sales being made and estimating the stock of goods in the shops. Within a few minutes, the team was withdrawn, after the FBR chairman received calls from the ruling party MNAs. Another case is that of a restaurant in Karachi, whose owner contacted powerful people when the shop’s records were seized. Within a couple of hours, the tax authorities returned the computers and files. How can you expect the FBR to function in such circumstance? By all means, go ahead and create a new tax agency, but don’t expect it to succeed, unless it is headed by foreign specialists and managers. Why can’t we have this? We do have foreign coaches for our cricket teams, don’t we?
And what can the FBR do when the government itself does nothing to punish land grabbers and the mafia of builders? It’s the same old story, those who’re rich and powerful remain free, while the poor have their houses demolished without even adequate notice.
As for corruption, this government appears to be like a fish out of water. It is estimated that corruption in the country amounts to Rs. 12 billion per day. It’s been almost seven months since PTI came into power, yet they’ve done nothing to stop it (otherwise, there wouldn’t have been a revenue shortfall). They can take the first step to curb this menace by demonetizing 5,000 rupee notes, and all prize bonds (ranging from Rs. 1,000 to Rs. 40,000). This will make it very difficult for the corrupt to take bribes. Only those who have declared cash and prize bonds in their tax returns should be allowed to surrender the notes and bonds those who haven’t done so should be asked how they earned the amount.
Today, there are estimated to be five to six million businesses in the country but only a hundred thousand (or just two percent) are registered with the sales tax department. If the government really wishes to increase tax revenue, all it has to do is to give a deadline to all businesses (operating in offices and shops) to get registered with sales tax departments and pay tax. Again, this will require vision and determination, which unfortunately the finance minister does not appear to have.
It really isn’t difficult for the government to bridge the current deficit. Imran should really go after and punish those who are evading taxes, even if means punishing those who support his party. The choice is yours, PM Imran: take tough decisions, don’t surrender to the tax thieves, don’t give them amnesty, in fact punish them for their crimes and see how the revenue shoots up. Otherwise, you too will be remembered as just another mediocre leader who had the chance to change the face of the country but failed to do so. 

Shakir Lakhani

Engineer, former visiting lecturer at NED Engineering College, industrialist, associated with petroleum/chemical industries for many years. Loves writing, and (in the opinion of most of those who know him), mentally unbalanced. He tweets @shakirlakhani (twitter.com/shakirlakhani)

Time to increase our defense budget!

Shakir Lakhani
March 12, 2019

If we have learnt one thing from the threats to destroy Pakistan by Indian leaders and media persons, it is this: we have to strengthen our defense capability. And for this we have to increase our defense budget by at least twenty five percent immediately. 

To give you an idea of how low our defense expenditure is, consider that Turkey spends twice the amount that we do on defense, despite having a population of only 80 million (compared to Pakistan’s 207 million). To put it simply, on an average every Pakistani contributes Rs. 500 per month to the defense budget, while every Turkish citizen pays Rs.2,500 per month for the defense of his country. This, despite the fact that Turkey does not have any external foes, while we have an enemy who has only one aim in life: to destroy Pakistan. Even in a small country like Switzerland (with no external enemies) every citizen has to pay the equivalent of Rs. 65,000 every month for its military! We should be ashamed of the reluctance of our people to pay taxes. 
So it is vitally necessary for us to increase military spending. However, in Pakistan, it’s the tax evaders (smugglers and other such looters) who are so powerful that no government has so far been able to recover full taxes from them. The only way to strengthen the military (and the country) is to increase the defense budget. But, as we have seen, the government is unable to raise the required revenue. In fact, the government is thinking of giving another amnesty scheme for tax evaders, despite Imran Khan having opposed such amnesties when he was in opposition. As for smugglers, they are the sacred cows who cannot be touched, even though they are responsible for the closure of hundreds of industries and loss of employment. I suppose we should be thankful that our lawmakers have so far not amended the Constitution to legalize smuggling!

So the only way to increase national revenue is by imposing indirect taxes without imposing a heavy burden on the poor. By levying a tax of Rs. 20 per kilo of sugar, the government can raise a hundred billion rupees in a year. Similarly, a defense surcharge of just Rs. 20 per gallon (Rs. 5 per litre) of crude oil at the import stage can yield another hundred billion rupees a year. As crude oil is used to make many products besides petrol and diesel, this levy can be spread in such a way that prices of petrol and diesel do not increase by more than a rupee per liter.

I know that increasing electricity and gas charges will be opposed, rather it will benefit those who indulge in gas and electricity theft, but as we are fighting for our very survival, we should not hesitate to offer a small sacrifice. I would suggest a rupee per unit of electricity to raise revenue by another hundred billion. A similar levy of a rupee per cubic meter of gas can be considered, which will give us fifty billion rupees. 

Smugglers and property sector crooks have successfully evaded efforts to tax them. However, it should not be forgotten that these unscrupulous people have houses and offices. To give you just one example of tax evasion by them and others like them, there are five million businesses in Pakistan, out of which only a hundred thousand are registered with the sales tax authorities. One way of taxing these tax evaders is to increase the penalty on cash withdrawals by non-filers to one percent for every fifty thousand rupees. Another measure would be to tax them according to the floor area of their houses, shops and offices. A tax of just ten paisas a day for every square foot of the floor area of all shops, offices and houses should yield more than fifty billion rupees every year, if not more (small shops and houses of widows may be exempted).
All the above mentioned steps should be taken immediately to raise an additional five hundred billion rupees every year for the defense of the motherland. Tax evaders and smugglers should be thankful that it is Pakistan which has made them rich, so it’s time for them to contribute to the defense of the nation.

Daily Times, March 12, 2019