Pakistan Institute of Development Economics


Happy taxpayers

Publication Year : 2015
Explore More : PIDE in Press

A COUPLE of months back, I heard the chairman of the Federal Board of Revenue say at a pre-budget seminar that the FBR was confronted with the challenge of ‘why should I pay taxes’. The implication was that taxpayers like to see ‘value for their money’. The failure to see taxes being put to good use encourages non-payment. The solution is obvious: put tax money to good use and tell the taxpayers how their money is being spent.Suppose we scribbled something like this inside metro buses: ‘This metro bus service has been established with taxes paid by you. Pay your taxes to enjoy more and better public services.’ Similar notices may pop up inside public hospitals and schools, near motorways, flyovers and bridges in every nook and corner of the country. A look at the notices tells people that at least a part of their tax money is being put to good use. Imagine the tampering with the ‘not paying taxes’ attitude.Taxpayers’ money is not always put to good use. At times it ends up in Swiss accounts and in Dubai malls or is spent on the lavish lifestyles of public officials who may not always fully do what they are paid for — from the taxpayers’ money. How do we combat this? Perhaps like this:Imagine a time when taxes are visibly put to good use.The prime minister decides to perform umrah during the last days of Ramazan. The news spreads and friends and relatives queue up to be taken along. As the prime minister is about to board his special plane, another plane is parked alongside on the tarmac; it is meant to carry his entourage of 100-plus.While climbing up the steps of his special plane, the prime minister notices the embossed words just over the entrance to the aircraft: ‘trip paid by Pakistanis’. He postpones the trip and the next day boards a regular PIA flight to Jeddah. Only his immediate family accompanies him.Currently, the president’s kitchen is paid for by taxpayers. The president arrives in the dining room for dinner with his family. The table is full of all sorts of dishes.The family, upon noticing ‘paid by Pakistanis’ embossed on the corners of white Correlle dishes moves back to the lounge without having dinner and orders something on their own from a local eatery that delivers. Meanwhile, the president tells his staff that from the next day on, he would be paying for kitchen expenses himself.How about scribbling on the walls of all public servants’ offices, ‘salary paid by Pakistanis’? Here is a glimpse of the potential benefits. A villager goes to the police station in the dead of night to tell the SHO that his buffalo has been stolen. The SHO gets angry with the villager for disturbing his sleep. The two get into a heated argument in the SHO’s office. The SHO stands up to tell the villager in the local colloquial ‘I have not been hired by your father’.At this moment, he catches a glimpse of ‘salary paid by Pakistanis’ scribbled on the wall in front. The SHO sits down, has a glass of water, registers the FIR and sends a raiding party to recover the poor man’s buffalo.Twenty-five years hence, the NAB ordinance has been amended to take out the plea-bargain clause and two former prime ministers have been sentenced for corruption. The courts now decide murder and property cases within months rather than decades; the younger generation is not familiar with the word ‘bhatta’; and the unemployed are paid a decent stipend from the tax revenues raised.By then, PTV News, run on taxpayers’ money, has become the most reliable source of independent and timely news. Its talk shows earn the best ratings because of their informative content and unbiased handling by anchors. Government- owned housing in urban centres, including the ones for the armed forces, run at the taxpayers’ expense, have been sold off. All government employees are paid enough to afford decent housing. Patwaris, paid out of taxpayers’ money, no longer provide men for the rallies of the party in power.The taxpayers’ money is no longer spent on the inauguration ceremonies of metros, dams and conferences. The ministers do not grace convocations. Advertisements, at taxpayers’ expense, glorifying the policies of the party in power are not featured. Healthcare is completely in the public sector, there are no private schools and there are no out-of-school children — all study till grade 12 at taxpayers’ expense in public schools. The prime minister’s chauffeur drives the prime minister’s son and his own in a modest car to a single school, and the two study in the same class. The tax-to-GDP ratio has increased phenomenally — to reach 40pc.The writer heads the School of Public Policy at the Pakistan Institute of Development Economics.