Raising revenue

In an effort to raise government revenue, the FBR has made it mandatory for manufacturers and importers to provide CNIC numbers of those buyers who are not registered with the income tax department. Although on paper it appears to be an excellent step, it may in fact turn out to be counterproductive, as it will make unregistered buyers turn to smugglers for supplies. As everyone knows, smugglers do not need to provide their CNIC numbers, or any other document for that matter, to anyone. Those foolish registered manufacturers and suppliers who pay taxes will soon go out of business and the government will be the loser. Needless to say, closure of factories and businesses will also result in massive unemployment.

The FBR should therefore devise some other method of increasing revenue, like making unregistered persons pay five percent more in sales tax. This practice was in vogue a few years ago, but was discontinued for some unknown reason.

Shakir Lakhani
Published in The News, September 19, 2011