Value added luck

One of the reasons for not meeting revenue collection targets by the FBR is the PML-N’s reluctance to introduce value added tax (VAT), probably because it does not wish to alienate its core constituency (traders and the business community). If, however, the government adopts a scheme whereby taxpayers have a chance of being rewarded, it should be easy to introduce VAT collection nation-wide. Such schemes have been successfully used in Taiwan, Turkey and the Indian state of Tamil Nadu.

Here’s how we can make it work: when a person pays more than a certain amount of VAT, he/she would be given a numbered coupon (those who buy more would be given coupons according to the amount they have paid as VAT). Using these numbers, a draw would be held every day and prizes would be given to the persons with the winning numbers. The draw would be televised nationally, and prize winners would know the results immediately. Religious scholars should have no objection to this scheme, since prize bond draws have been acceptable. People would wish to buy only from those stores that charge VAT and give the numbered coupons. In this way, the government could collect a substantial amount.

Shakir Lakhani
Printed in The News, September 24, 2013