Become foolish when in government, and wise when in opposition


Muhammad Ijaz,


In our Parliament, it is very common to observe that our politicians are wise, appealing, and
having honest ideas to run the state, when sitting in opposition. Though, when they switch their
position, after elections, from opposition benches to government benches, those magnificent ideas
become useless and then they justify their foolish deeds and creeds illogically. Interestingly, our current
government with new slogans and cabinet of old faces from previous governments also has precedents
of old traditions. When PTI was in opposition, we used to hear so-called promises of Asad Umer (ex-
Finance Minister) and our beloved PM regarding economy, tax collection, inflation, and oil prices but
when PTI held the government, all sweetly voiced promises turned into horrible and pathetic
nightmares. The whole wisdom became the victim of old patron of governance. Consequently, public is
facing and listening to the same old justifications and same so-called logics which remained the rhetoric
of old and known faces of cabinet since last two decades.
Economy wise, every state depends on its tax collection mechanism and fiscal legislation. In
developing and under-developed countries, mostly the issues have emerged due to the poor economic
policies of government. Like others, Pakistan also has a bitter example of poor economic system that is
dependent on poor implementations of economic policies. Being a student of economics, I and
everybody else knows that state revenue is collected through two ways. First source that is always
considered a major chunk of revenue is direct taxes and second one is indirect taxes. Collecting the
revenue through direct taxes has always remained a hard task in Pakistan for every government because
those taxes are collected from the rich, elite and bourgeoisie class and unfortunately, our cabinet and
parliament is the representative of this class that become a major hurdle in collecting direct taxes from
these people. Tax to GDP ratio reflects the economic policies of any state’s government. In developed
countries, direct tax to GDP remains high. For example, in France, Tax to GDP ratio is almost 46.2%, in
Denmark 46%, in Sweden 44%, in Belgium 44% and in Norway 38%. In all these countries direct tax to
total tax ratio remains high as compared to indirect tax, therefore, the poverty ratio in these countries is
low. In Pakistan, the taxation system works vice versa. Our government’s tax collection to GDP is almost
12% while share of direct taxes to total tax collection is just 40% and rest of tax collected through
indirect form is 60%. Interestingly, 10% of the poorest population of Pakistan has to pay 17.5% indirect
tax and economic elite class is paying just 10% of their total income in the form of indirect tax. Our
taxation system has failed not only to remove the differentiation line between the rich and the poor in
the context of tax collection but more interestingly it favors the elite class to save their wealth by
refraining from paying taxes. In all developed countries, agricultural tax has always remained high in all
types of direct taxes. While in Pakistan, it is equal to zero that is ridiculously imposed over landlord and
feudal class which is less than 0.09%. Our previous government has designed such economic policies
where common layman is engulfed into problems whereas the elite class is enjoying luxuries. In our

financial budget, figure of paid direct tax is so pathetic. Only 8 lac people are paying direct tax out of 210
million population which amounts to just 0.3%. Our FBR has failed even to register the business activities
of the economic class. If tax collection machinery is not capable to judge, then how can they collect the
taxes from these people justly? 90% direct tax payers are salaried persons while business men,
industrialists, and landlords are not paying the tax due to different so-called reasons that could be
tagged as favoritism, corruption, nepotism, mal-administration of FBR, political favor to non-tax payers,
weak judicial system, loopholes in the tax law, and experts of law that have many tactics to save their
clients. In short, our government has failed to remove these loopholes of economy through fiscal
legislation. The cost of these loopholes is very high that is paid by the lower class in the form of indirect
tax. The beneficiary of weak economic policies, no doubt, is the economic elite class which has its
representatives in the sacrosanct parliament, therefore, this class always skips from the cruel jaws of tax
collection machinery. Now, the major economic problem of government regarding tax collection has
increased and government easily switched over her burden of incompetency from elite to middle and
lower class through indirect taxation. In other words, we can say that indirect taxation is directly
proportional to government inefficiencies and malpractices. The big tool of government to collect the
revenue through indirect taxes is to increase the taxes on oil productions and utility bills and these taxes
lead to further three layers of taxes that have to be paid by the end users. Among those end users, rich
class has remained uninfluenced while the middle class has become a major victim of it. Current
government has increased the oil prices in this week and gave the justification that in international
market the prices of petroleum products are high. But this is not the truth, because in international
market the price of crude oil is just $ 62 per barrel that is even less than the price in July 2018 ($74 per
barrel). The justification by the government is very intriguing that finance ministry is increasing GST
rather than increasing the basic payment of oil. Every literate person knows that GST is the indirect tax
and not the cost of product. Now the question is, who is the beneficiary of such type of economic
policy? Riposte is very simple that indirect tax never hurts the volume of big bank balance holders
because they are paying hundreds and thousands in the form of this mode of taxation instead of millions
which they are saving due to existing loopholes of our economic policies. Finally, it is a humble request
to our respected PM, kindly bring back the wise mind while you were in the opposition and do not
become foolish into the hands of babocracy, landlordism, feudalism, industrial mafia and last but not
the least FBR’s policies. Otherwise, the wisdom of current opposition is beyond any doubt because now
they are speaking wisdom as compared to the rhetoric of those in government benches.

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