The News - August 1

DEATH by TAXES

By Shahir Hussain

It took a two page report and a video on their website by the New York Times to demonstrate to many young people the abysmal state of tax collection in Pakistan. Social media platforms like Twitter and Facebook were awash with outraged tweets and posts of the article which described how only 2.5 million people in Pakistan pay income taxes whereas there should be at least 10 million registered tax payers.
 
This is nothing new. Tax evasion is a game which is played in the highest echelons of power and emulated all the way down the power tree. Pakistan has one of the most regressive taxation systems in the world where the poor pay for the dishonesty of the rich via indirect taxes like the General Sales Tax (GST), levies on utility bills, petrol, medicines, and anything that they need to scrape out an existence. The rich keep buying their luxury vehicles and living in palatial homes which nobody will ever question. Most politicians’ income declarations enable them to apply for the Benazir Income Support Fund yet they drive cars worth millions of rupees.
 
Tax evasion didn’t just arrive in Pakistan as a sport, we wrote the manual for it decades ago. But in October or even earlier things are going to get worse. The World Bank and the IMF have decided that it’s not funny anymore and if the government of Pakistan wants to borrow billions of dollars then it better start collecting more taxes. The political will to tax agriculture just doesn’t exist so we’re going to get hit by the Value Added Tax (VAT) or a modified GST which will again increase the burden of taxation on the poor people of Pakistan and the middle class. Incidentally these aren’t the people who are buying four wheelers yet they’re the ones the super GST is going to shaft the most.
 
Recently, I was present during a conversation between a non-resident Pakistani (NRP) and a friend who has worked at the IMF for a decade. The NRP was talking about using fool-proof technology to incentivize people to pay their taxes like his new home while the IMF-wala was trying to explain to him (rather unsuccessfully) that all the laws and systems in the world existed in Pakistan yet when it came to political and bureaucratic will we failed. He recounted a meeting with the former finance minister where the minister was talking about reforming the taxation and collection system — his observation was that the bureaucrats in the ministers’ team were smirking visibly as if to say “let him talk, he’ll be gone soon and we’ll be here for decades”. The said minister resigned soon after.
 
So what look like simple solutions to people with a few brain cells turn into complex collider experiments once they enter the machinations of the government of Pakistan. Everyone wants to know one thing and one thing alone, “What’s in it for me and mine?” This was not the public service our grandparents had in mind when the arrived in Pakistan sixty odd years ago. But the truth is that Pakistan is a large cow and there are parasites which have attached themselves to it for decades and there’s no one who’s going to pick the ticks off. There’s a reason why such few Pakistani businesses have succeeded like their Indian cousins internationally. The lack of political and bureaucratic support just doesn’t exist for them to succeed the way they have managed in Pakistan. Essentially we are a rent seeking economy where the seths have gotten a flavor for easy money without really feeling the need to pay taxes. The property business is a case in point with the fabled “file”. Say a commercial plot in Defence Karachi costs 1 crore PKR and an investor buys it.


The file will show the value of the file as 5 lacs PKR instead of 1 crore. Everyone knows this happens yet the FBR and the CBR can’t do anything about it because our political and bureaucratic leaders don’t allow it.
 
In India something very similar used to happen, until the Indian government announced that it would buy any property at the value stated on the file and pay a 25 per cent premium to the owner. Within months the files started to reflect the real value of the property and there was a massive increase in revenues for the taxation authorities. There are thousands of creative ways to plug the gaps without passing on the burden of taxation to the poor in the form of indirect taxes. Unfortunately all of them require the essence of public service to come back to the folks in Islamabad instead of being concerned about stuffing their pockets.
 
An interesting piece of research released recently demonstrates that the assets of our legislators double within two years of getting elected – and this is not a trend started by this particular Government, it’s something which happens with every government once it’s elected. October is around the corner and unless we can get our house in order and fast, there are going to be crushing indirect taxes which will be imposed on the masses and the middle classes. Buying SUVs requires money and the international community has decided that they’re not going to pay for them anymore.

The writer lives in Karachi. Email: shakir.thenews@gmail .com

Source : http://www.thenews.com.pk/daily_detail.asp?id=254132

The Asian Age - July 23

There’s No Excuse For Such Behaviour

Even as we can understand that actions of ordained political actors will be guided by the urge to derive the maximum perceived advantage months before a major election, it is hard to see how the shenanigans of Opposition legislators in Bihar can be justified on any count. The wholly blameworthy acts of disruption and violence indulged in by the Opposition parties in the state Assembly on Wednesday can hardly be said to inaugurate a soiled chapter. In recent years unacceptable behaviour of the same type has been witnessed in several state legislatures. Indeed, the way MPs — who could have set an example — have conducted themselves in the Lok Sabha in recent years can hardly be deemed worthy of emulation. Even so, it is no exaggeration to suggest that Bihar’s legislators have shown the way to a new low in unbecoming conduct by public servants — all in the name of safeguarding the values enshrined in the idea of representative government of course. Before long, in order to shame our legislators, a public-spirited body that cares for democracy might see it fit to invite MLAs and MPs to a tongue-lashing by those who elect them. Or are we expecting too much from those we vote in, considering that a fair proportion — across the political spectrum — have serious criminal cases instituted against them?

The Comptroller and Auditor-General of India has indicted the Bihar government of malfeasance to the tune of several thousand crores of rupees in the last seven years. The matter is out in the open with the Patna high court ordering a CBI probe following a public interest litigation case. In the event, any Opposition worth its timbre would be up in arms. However, this gives the parties outside the government no licence to smash furniture and seek to hurl missiles at the Speaker. It is debatable whether the Speaker should have suspended the entire Opposition for the remainder of the Assembly’s term, set to expire in four months, or if he should have asked the marshals to bundle out the MLAs forcefully. But there is no question that the Opposition parties behaved without a modicum of dignity even when they were within their rights to lodge their protest emphatically. The ruling side too has taken a needlessly confrontationist stand in relation to the judiciary. The Speaker has held that the high court was out of order in ordering a CBI probe before the Assembly had disposed of the matter. This appears an extreme view. The judiciary is an independent branch of the government and is not obliged to take its cue from the legislature. Besides, in this case the high court gave its order in the context of a PIL. The Nitish Kumar-led NDA government has appealed to the court to stay its order directing a CBI probe. It might have been a lot better if the chief minister had himself decided to ask for a CBI inquiry. The Opposition has demanded the resignations of the chief minister and his deputy so that they may not influence the proposed investigation. Since state elections are due in four months, the chief minister may consider exercising his prerogative to dissolve the House.

Source : http://www.asianage.com/editorial/there’s-no-excuse-such-behaviour-682

The Jerusalem Post - July 28

Waging war morally

The ravages of the Afghanistan war were displayed for all to see. Tens of thousands of documents, most of them descriptions made by lower-ranking servicemen of specific incidents that took place between January 2004 and December 2009, detailed the day-today realities confronted by the coalition forces in Afghanistan.

There was the duplicity of Pakistan, suspected of receiving aid from the US and other coalition countries, while at the same time providing Taliban forces with vital support. There was the widespread corruption of Afghanistan’s officials and police, which prevented funds earmarked for orphanages, hospitals and other humanitarian needs from reaching their destination.

But what received the most Israeli media coverage – because of the pertinence to Israel’s battles against Hamas and Hizbullah – were the extensive reports of civilian deaths caused by coalition forces.

Julian Assange, founder of Wikileaks, who this week made public the 91,000 secret, sensitiveUS military documents on the war in Afghanistan, said at a press conference on Sunday, “It is up to a court to decide clearly whether something is, in the end, a crime. That said, on the face of it, there does appear to be evidence of war crimes in this material.”

Assange did not seem too concerned about the possible criminality of his own decision to leak documents that could endanger coalition forces operating in Afghanistan.

WERE JUDGE Richard Goldstone to look into the incidents of civilian deaths detailed in the paperwork, he would probably agree with Assange. Judging from Goldstone’s verdict on Israel during Operation Cast Lead, as detailed in his UN report, he would all but ignore the Taliban’s use of Afghanistan’s civilians as human shields, while incriminating the US, Britain and the other coalition forces for perpetrating war crimes such as disproportionate collateral damage.

In fact, applying Goldstone’s ethical standards would effectively rule out the possibility of warfare of any kind against foes like the Taliban.

“When you send a lot of soldiers to a place like Afghanistan inevitably there will be some civilian casualties,” Prof. Asa Kasher, an internationally renowned expert on military ethics and author of the IDF’s moral code, noted in response to the Wikileaks material. In other words, it is impossible to launch a war against the Taliban in Afghanistan, or for that matter, against Hamas in Gaza, without committing what Goldstone and other human rights activists would consider to be “war crimes.”

According to Kasher, Israel’s rules of engagement are utterly ethical and essentially the same as those of all other western countries, including the US, Britain, Germany, France, Italy and other coalition countries fighting in Afghanistan. Professionalism, another important factor in maintaining a high ethical standard, is also equivalent.

So if Israel’s actions in Gaza were judged to be illegal, so would the coalition’s in Afghanistan.

THE IMPLICATIONS of Goldstone’s thinking are farreaching – and not just for Israel – as the leaked documents underline.

Were his parameters accepted, they would mean that Israel, unable to engage in warfare with Hamas without causing civilian casualties, would have to refrain from defending itself altogether. Instead, it would have to rely on diplomacy with an organization that refuses to recognize the right of Israel to exist. Doing nothing to protect residents of Sderot and other settlements near Gaza from the constant barrage of Kassam missiles is, apparently, not immoral.

Meanwhile, the US, Britain and the other coalition forces would have to give up their war against the Taliban and Al-Qaida, launched after 9/11. Religious extremism would be free to run rampant, murderously settling scores against those who cooperated with the coalition forces in the hope of ushering in a freer society – women who removed the burqa, politicians who pushed for democracy and freedom, and educators who hoped to supplement the Koran with math, science and literature.

But morality does not demand submission to terrorists and violent religious extremists. Terrible things happen in war, including the unavoidable deaths of civilians.

But refraining from waging war against evil, or defending what is good, is a betrayal of the human obligation to champion freedom.

That would be truly immoral.

Source :  http://www.jpost.com/Opinion/Editorials/Article.aspx?id=182929

The Asian Age - July 31

Cameron, In India, Sends Right Signals

The empire has faded. In the decades since Indian independence and decolonisation, Britain has leaned across the Atlantic toward the United States in search of economic and political consolidation. In more recent times, with the emergence of the European Union, the British inclination has been to combine its American relationship with solicitousness for Europe. However, with even the powerful European economies as well as the US recording at best moderate growth rates over the years, it has been natural for London to pay more attention to India which not so long ago was viewed as “an exotic basket case”. But that was then. With the recent near collapse of the international financial system, and the Indian economy still making a stab at a nine per cent rate of growth, there was little question that Prime Minister David Cameron would seek to lay the “foundations for an enhanced relationship” with this country, to use his words before he began his three-day India visit earlier this week.

The British leader’s visit has been a huge publicity success, with Mr Cameron making the right social and political pitch in both Bengaluru and New Delhi, not to mention his ability to be one of the boys wherever he went. He didn’t lecture. He didn’t go on village safaris. He just let people think he was being himself. That’s a quality people like in a leader. Perhaps the Prime Minister could conduct himself in the manner he did because he was able to facilitate the £700 million agreement between BAE-Rolls Royce and Hindustan Aeronautics to purchase 57 more Hawk trainer jets. This is a big boost to British manufacturing in bad times. But the importance of Mr Cameron’s visit will be judged by going beyond trade. His sharp criticism of Pakistan on the terrorism issue, and later statement that he stood by what he had said, would earn the new British leader bonus points in India. No Western leader has spoken with such frankness on the subject of Pakistan from Indian soil. The Americans have typically equivocated. The other Europeans are not as culturally and historically tuned to the subcontinent as Britain is. So, somewhere it matters, and what Mr Cameron had to say stung Islamabad into almost cancelling President Asif Ali Zardari’s proposed visit to London in early August. It is too early to say if British policy toward Pakistan is changing in any basic way, but many will hope London looks at Islamabad on merit. It has to make a considered judgment whether pandering to Pakistan would really be of help in containing or eliminating the prospects of future terrorist strikes in Britain.

On his three-day trip, Mr Cameron led a team of as many as six Cabinet ministers, including the foreign secretary, chancellor of the exchequer and business minister, besides top corporate executives and culture and art heavyweights. It is said there hasn’t been a larger British trade delegation “in living memory”, or a larger top-level delegation since the end of the Raj. The focus of the visit was clearly trade “and jobs”, as the British leader noted. If that’s the case — and Britain does need to recover from going from fourth to 18th place as the source of India’s imports — then Mr Cameron’s trip would carry greater meaning if he is able to attend to the key question of permitting Indian entrepreneurs, professionals and students from purposeful residence in Britain. Slashing non-EU immigration from next year would probably hurt deserving Indians more than people from any other country. Britain is pitching for trade in civil nuclear energy, banking, insurance and legal services. All of these will naturally have to be negotiated. But Mr Cameron has begun on a positive note.

Source : http://www.asianage.com/editorial/cameron-india-sends-right-signals-227