- PTI government’s failure to reform tax structure shown
The most important feature of the recent disclosure by the Federal Board of Revenue of the taxes paid by the members of the two houses of Parliament, and the provincial legislatures, shows that the tax structure of the country remains unreformed. This was one of the core promises of the ruling PTI, which flowed from its argument that one of the methods of corruption practiced by the elite was to bend the tax laws so they could claim exemptions, and also to make sure that the tax machinery did not press them. That criterion seems to apply to the PTI, where both Punjab Chief Minister Usman Buzdar and Federal Water Resources Minister paid no tax whatsoever. Either the tax machinery is going lightly on them, or the law favours them. It is also interesting that ex-PM Shahid Khaqan Abbasi, who has been repeatedly accused of corruption, has turned out to be Parliament’s highest taxpayer, having paid Rs 241,362,329 in tax year 2018. That compares favourably with the Rs 282,449 paid by Prime Minister Imran Khan that year.
Instead of reforming the FBR, the government seems to be turning it for use against political opponents, as is shown by the order showing back taxes of Rs 35 million against Mrs Sarina Isa, the wife of Mr Justice Qazi Faez Isa, against whom the government proceeded in the Supreme Judicial Council. This might show that the government will lessen its reliance on NAB, against which the Supreme Court recently passed strictures.
The failure of Mr Buzdar to pay taxes is probably because he availed the exemption of agricultural income from federal income tax. Some small amount is charged per acre, but if agricultural income was duly taxed, with cultivators allowed to claim exemptions for their expenses, a huge amount could be raised, and a large number of people brought within the tax net. However, not only has the PTI government failed to reform this loophole, but it seems that its members are still using it. It is also subject to abuse, as people with both agricultural and non-agricultural income, show money otherwise earned as agricultural income. The FBR seems destined to remain unreformed, being useful that way.