By Humayun Gauhar
Stop defaming our people. It is not that we don’t pay taxes. It is that our governments don’t take taxes. It is a grave injustice to accuse Pakistanis of being tax evaders when governments tax only a few and keeps squeezing them while most of the economy remains undocumented and outside the tax net and an entire sector amounting to a quarter of the GDP is constitutionally outside the income tax net. More power to the feudal, what?
What frauds they are to revile their employers who appoint them as their servants at high salaries and perks. They are not supposed to loot them and then lord it over them all the while pretending that they are doing them favours when all they are doing is their job very badly. Their job is to improve their employers’ lot, not make a mess and then blame their employers for being tax evaders. Can foreign governments then be blamed for saying, “No more largesse if you don’t pay taxes.” If your own employees defame you, why shouldn’t others? Instead, they should say, “No more largesse if you keep employing thieves and incompetents to run your affairs.” That would be fair and accurate.
Look, no one likes paying tax. It is human nature. In western countries they pay not just because they are good citizens. They also pay because they know that if they are caught they will be hung and quartered and no mercy shown, not even to the high, mighty and famous. If we did that we would hardly have an employee left for they are mostly tax evaders themselves.
Who the hell told them not to tax those who should be taxed? Why cannot they document the legal but ‘informal’ economy? Why have they ducked the issue of making feudal lords and tribal chieftains pay income tax by making agriculture a provincial subject? Agriculture should be provincial; income tax is always a federal subject. Those who earn above a certain amount have to pay regardless of what source it has been earned from, even dancing girls and eunuchs. I dare say they pay in cash and kind more than our rulers do.
Who told them to appoint tax collectors that actually tutor taxpayers on how to pay less provided they give them a bribe? If you don’t your servants have the power to slap wrong and unverified tax demands on you and make you run from pillar to post trying to get justice from an avowedly Islamic state whose systems are all based on injustice. You will only get off the hook by paying a larger bribe. Then you want me to tell you about the budget? It’s a fraud. It’s a sham. It’s a big yawn.
I use my words advisedly. Look at this headline: “Plan to seek IMG loan for settling debt.” What does this nonsense mean? A loan is a debt. Loans increase debt, not “settle” it. Our born-again finance minister follows the standard operating procedure: blame the predecessor. After the budget he said: “Our predecessors have left behind a large debt stock. We have not taken these loans, but we will pay it back. We will borrow to repay instead of adding to the debt stock.” Could someone please give me the key to decode this gibberish? Sure they didn’t take these loans; they had taken other loans in the past and when they gave way to the army in 1999 our total debt was nearly as much as our GDP. If Musharraf and Shaukat Aziz could bring it down to some 57 percent, why can’t they? Do what Shaukat Aziz did: negotiate debt reprofiling from the Paris Club. You will say that Shaukat took advantage of America’s need for our support after 9/11. Sure he did, but it was only because he and his boss had the sense to take advantage of it. A wise person uses whatever advantages he has for his benefit. This government too has such an advantage, perhaps a greater one: America’s need for Pakistan’s support to enable an orderly withdrawal from Afghanistan by end 2014. Use it. Get your debt reprofiled again. Then you will have the breathing space you need. But you still won’t do what needs to be done because you don’t know how to do it, because you have another agenda: self-perpetuation and self-aggrandizement. This is what happens to a people who become so totally dependent that they lose their independence and sovereignty and have to dance to Mr. Moneybags’ tune.
So what do they do? They give us not a ‘people-friendly’ (whatever that means) budget but an IMF-friendly one. Budgets should be country-friendly; they then become people-friendly in course of time – short-term pain for long-term gain.
Our new government is old wine in old bottles that were stored for 14 years. Real wine improves with age but not human wine already gone off for the grape is bad. They cannot think out of the box and adopt a new economic model based on realistic self-reliance – live within your means as best as you can and let Mr. Moneybags take the hindmost. Given our dire economic straits, all they know is that they cannot do without another IMF bailout which they politely call ‘programme’. So their brilliant strategy is: better to implement some obvious IMG conditions now to enable a quick IMF programme rather than be seen to be pandering to the Fund later. Now you understand why the budget came in such indecent haste? Wouldn’t it have been better to wait for negotiations and then agree to unavoidable conditions but in return for some of our own terms? Those who count votes don’t think like this. Those who don’t know their own strengths and others’ weaknesses and needs don’t understand this.
An IMF bailout will only create the illusion of ending pain in one place by creating greater pain in another. If you have a headache and I break your knee with a hammer you will forget your headache and start moaning about your knee. Your attention is diverted from your headache and you will think that I have cured it. It’s like a housewife taking the muck out from under one corner of the carpet and hiding it under another. This doesn’t decrease pain but increases indebtedness and our annual debt-servicing bill. With nothing left for anything else we keep printing more notes until inflation hits the stratosphere. We keep taking more loans to service existing loans and keep building our debt burden under which the backs of future generations will break. We have sold our soul to Dr. Faustus, so what is all this analyzing about? What else can a team short of imagination and long on rhetoric do? It has already been measured twice before and found wanting. They treat any sort of authority as a fief instead of a trust.
How can I paint a rosy picture for you then? That would be hypocrisy, something we are adept at. People belittle bitter truth-tellers as purveyors of doom and gloom, but in so doing they only gain false temporary comfort. When the truth finally hits them in the face like a wet fish they shall know.
We treat symptoms rather than the disease. Our economic disease is that government doesn’t earn enough revenue to meet its needs. Bridge that gap and you bridge everything – fiscal deficit, circular debt, energy shortfall, blah, blah, blah – all will be solved if government collects enough revenue.
Now cost of living will increase and incomes squeezed. Put another way, prices will go up while real incomes come down. This is the perfect recipe for an explosion. We used to take comfort in the fact that an Arab Spring type revolt couldn’t happen here because unlike them we have safety valves – democracy or what passes for it, parliaments infested with more liars than truth tellers and a press that is free but not totally independent. Well, Turkey had the same safety valves and it exploded without warning while we were perpetually being harangued to emulate the ‘Turkish Model’. In the blink of an eye it has become a model of what not to emulate. The excuses that Turkey may have been infiltrated by Syrian militants, Al Qaeda or Israel taking revenge for its prime minister having to apologize to the Turkish prime minister over the flotilla incident don’t hold water that can douse the fire. No one can light a spark unless you have prepared the tinderbox yourself.
Pakistan too is a dry wood tinderbox. Smoke has started coming out. Food and water are what matter, not excuses that people cannot eat. If they are missing conflagration becomes inevitable. It needs just one spark. What that spark will be no one can guess: something as one-off as a fruit seller self-immolating or a protest over a building. These are just excuses for pent up rage and frustration to boil over. Then our charmed rulers and their stooges will have nowhere to hide. If a country like Pakistan explodes all hell will break loose. No one wants that. So watch it and come down to earth the home of reality.