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