Taxation in our economy

Taxation has always been a vital part of any modern society. From time immemorial, we have seen governments taxing their citizens in order to finance their expenditure and for other constructive purposes. The tax structure of any country plays a pivotal role in the country’s economic development. Revenue collection is not the sole purpose of tax system but it is also a tool that is utilized to reinforce or eliminate activities and pursuits that are determined by the legal system.

It can be said that a flawed tax system of Pakistan is a primary reason for the persistent budget deficits that Pakistan has to face every year.  Apart from the fact, the government is adopting a nonserious attitude in reducing the losses of the public sector enterprises such as PIA, Pakistan Railways, and Pakistan Steel Mills. Moreover, Pakistan is borrowing from international financial institutions is also a direct consequence of its failure to collect significant amounts of tax revenue. Hence, if Pakistan is able to increase its tax revenue significantly, she shall definitely be able to avoid borrowing from institutions such as World Bank and IMF that impose tough conditions.

In Pakistan, no one ever convicted or sent to prison on the matter of tax evasion.  There is a direct need to impose strict legal implications upon those people who evade tax at a high level. The inland Revenue commissioner should be given legal power or Government can give instructions to the police to act on the advice of the commissioner.

It is commonly observed that in FBR every single and common letter or document needs the signature of the Commissioner, Additional commissioner, Deputy Commissioner and Assistant commissioner. This results in the wastage of much time and makes system and performance weak of FBR as well. Substantial rights and powers should be given at every level. However, the critical matter should be approved by more than two officers including the Commissioner.

Corruption is the reason due to which a hefty portion of our tax revenue is wasted away and is not spent on social development and national infrastructure projects. Some of those measures can be to make sure that no hurdle is put in the path of the greater tax collection in Pakistan:

I. Firstly, the customs department which is heavily involved in the under-invoicing and incorrect declarations should be revamped at war footings.

II. Besides this competent and dedicated personnel should be hired. Most importantly the hearing should be made solely on merit so that deserving and clean people could serve the country.

III. Furthermore, the people who make up the tax machinery should be held accountable and their performance should be monitored regularly. An intelligence division should be made within the Directorate Intelligence and Investigation, in order to keep a check on the employees.

IV. Moving on, any abuse of authority if observed should be punished suitably. In order to come with the proper environment in which everyone does his own work and do it properly, the senior management should set an example for the juniors.

V. Plus to generate honesty and reward hard work in the tax machinery, anyone who is doing good work should be given incentives plus anyone who uncovers any major tax evasion or a scam should be given 25% of the detected amount.

Hence, measures like these can lead to the creation of a controlled environment in the tax machinery of Pakistan that will ultimately lead to the increase in tax revenue being collected and a lot less money being wasted due to corruption.

Furthermore, in today’s environment, it is crucial for the FBR to conduct strong audits in order to ensure that the tax returns filed by the taxpayers on self-assessment basis are accurate and complete and these returns do not in any way understate the income of the taxpayer.

If the base of Taxation in Pakistan is not rectified and Individual’s with high incomes are not subjected to Taxation ( big fishes ) then it’s a threat to Pakistan’s economy. The economy runs on the taxation and for long-term survival involvement of FBR in Tax, corruption should have to be solved.


Social Construction of Climate Change

Social Construction of Climate Change as a Threat will Bring Peace in the Subcontinent

In the years to come our mother planet earth will face destructive situations due to the impacts of climate change. Few areas of the mother planet will be facing the threat at more severe levels than rest, South Asia is one of those. Subcontinent together with Afghanistan will be severely affected by the climate change and will have severe impacts on all sectors of life. The region is facing turmoil, conflicts and enduring rivalry among the different states causing a threat of climate change on a lethal neglect. The subcontinent has witnessed intense conflicts resulting in huge material and nonmaterial loss. Over the decades billions of dollars are utilized by states to counter each other in order to get socially constructed material and nonmaterial interests. On the other hand, very little amount of capital was invested in humans resulting in poverty and miseries across the region. Due to these socially constructed priorities, human security is seriously neglected aspect in the region and climate change is one of the vital aspects in this regards.

Traditional pessimistic approaches in the global political system badly need construction, deconstruction, and reconstruction of ideas to bring betterment in human life. It is proposed that social meanings attached to the ideas, beliefs, and objects construct identities and interests leading to make our world either secure or insecure. The socially constructed identities and interests are in positive relation with the creation of hostility in the sub-continent. There is a need to look in the traditional constructed identities and interests which have resulted in the enslavement of humans and states across the region.

Here I want to propose that states in the region need to review their past policies which resulted in hostilities with implications of huge losses and must coup up the challenge of human security with all its aspects. As mentioned earlier environment is one of the core aspects of human security. By adapting the processes of construction, deconstruction, and reconstruction of ideas, beliefs and objects, the situation can be made favorable to avoid severe impacts of climate change jointly. There is a need to construct climate change as a mutual threat to the states, as joint efforts are required to emancipate billions of miserable humans living in the region.

Emission of green house gases, global warming, melting of glaciers, rising ocean waters, changing normal patterns of weather, food security, famines, droughts and massive flooding are the few impacts of climate change to our region which needs construction of same as a mutual threat on all levels, i.e, individuals to state and international. International, regional and national institutions need to be utilized for social construction of identities and interests in this regards. The state and nonstate actors need to work jointly to tackle the threat as billions of humans security are at stake. I think it’s “now or never situation for SOCIAL CONSTRUCTION OF CLIMATE CHANGE AS A MUTUAL THREAT TO THE REGION, as we are running out of time”. If the situation is not dealt prudently, “CLIMATE CHANGE WILL BE ONE OF THE CAUSES OF CONFLICT IN THE REGION” endangering the life of billions in the region and will also have serious implications for the international community.South Asian countries and global community badly need to give attention to the social construction of climate change as a threat to help them in agenda setting on all levels from individuals to states and international.


Climate change: Causes, Consequences and Solution

Climate change is a long-term shift in the statistics of the weather, For example, it could be the tremendous change in season variations or temperature. We know that the global climate is currently changing. The last decade of the 20th Century and the beginning of the 21st have been the warmest period in the entire global history, starting in the mid of 19th century. Climate change is a normal part of the Earth’s natural variability, which is related to interactions among the atmosphere, ocean, and land including changing the amount of solar radiation reaching the earth. Increases in the atmospheric concentrations of these gasses cause Earth to warm by trapping more of this heat. Human activities especially the burning of fossil fuels since the start of the Industrial Revolution have increased atmospheric CO2 concentrations by about 40%, with more than half the increase occurring since 1970.

This has been accompanied by warming of the ocean, a rise in sea level, a strong decline in sea ice, and many other associated climate effects. Different influences on climate have different signatures in climate records. These unique fingerprints are easier to see by probing beyond a single number like the temperature of the earth and looking instead at the geographical and seasonal patterns of climate change. The observed patterns of surface warming, temperature changes through the atmosphere, increases in ocean heat content, increases in atmospheric moisture, sea level rise, and increased melting of land and sea ice also match the patterns scientists expect to see due to rising levels of CO2 and other human-induced changes.

Climate change has the potential to undermine sustainable development, increase poverty, and delay or prevent the realization of the Millennium Development Goals. An effective way to address the impacts of climate change is by integrating adaptation measures into sustainable development strategies so as to reduce the pressure on natural resources, improve environmental risk management, and increase the social well-being of the poor.

Climate change can influence humans directly, through impacts on health and the risk of extreme events on lives, livelihoods and human settlements, and indirectly, through impacts on food security and the viability of natural resource-based economic activity. Climate change requires a global framework for international cooperation and adaptation action is a vital part of this framework. Actions to enable adaptation to climate change pose opportunities to promote sustainable development. All countries especially development countries require resources in order to promote these actions.

A successful framework must directly involve assistance for adaptation in developing countries in order to achieve the climate sustainability. It is the matter of concern to aware the whole word about disastrous effect of climate change and different measure through which we can tackle climate change. Laymen should include in process of preserving the climate by engaging him through different mean like workshops and seminars.

Indirect Taxation – Burden on General Public

The current taxation system of Pakistan is based on the Income Tax Ordinance issued in 2001. It depicts a progressive tax system of Pakistan, but unfortunately, we are regressing instead of progressing. That discriminating taxation system has culminated in rising poverty and inequality in Pakistan that 40 per cent people live under the poverty line. The ratio of stunt children in Pakistan is rising approximately with 44 per cent of children stunted and 9.6 million children having experienced chronic nutrition deprivation.

There are four main sources of revenue for the government such as general sales tax (GST), central excise duty (CED), Customs Duty and Income Tax. The structure of these is highly dominated by indirect taxes, which combines over two-third (nearly 70 per cent) of combined federal and provincial tax receipts.

The general public in Pakistan is laboring under the heavy burden of taxes because all the common public necessary commodities are levied with heavy taxes. The poor people in Pakistan are taxed more than rich, with estimates that lowest 10 percent poor people of Pakistan contribute 16 percent of their income to indirect taxes while the rich 10 percent contribute only 10 per cent[1]. Those 10 percent of the poorest households contributes through indirect taxes such as General Sales Tax, Central Excise Duty, and Customs Duty.

The factionalized elites have captured the economy and dominate politics situation of the country. They make decisions that are in their favor and this is one of the giant hurdles toward progressive tax system. Those elites do not pay a due share of their wealth or affluent that contribute to tax revenue. Moreover, the widespread exemptions and privileges are granted to the rich and influential at the heavy costs of poor.

Thus, the concentration of wealth is in the hands of the few that leads to undue political influence, which ultimately robs citizens of natural resource revenues, produces unfair tax policies and encourages corrupt practices, and challenges the regulatory powers of governments. Of 10 million people who qualify to pay tax, only 2.5 million are actually registered to pay tax. Daily expenses of Prime Minister Secretariat are Rs 2.2 million. Pakistan Parliamentarians have on average assets worth $900,000 (with the richest member worth $37m), but only a few Parliamentarians pay tax. In 2010, a review of Parliament and provincial assemblies revealed that 61% of 15 lawmakers paid no income tax during the year they contested elections. The influence of elites continuous in the business world with; only 100 companies (out of an estimated 64,000) paying 80% of total taxes collected by the Federal Board of Revenue.

In Pakistan, there has been a shift from equitable taxes to highly inequitable ones. The dependence on indirect taxes ‐ even in income tax law under the garb of probable income has transferred the burden of taxes from the rich to the poor. The common people are paying an excessive sales tax of 17% (in fact 35%‐40% on finished imported goods after duties, mandatory value addition under sales tax law and income tax at source) on essential commodities while the rich are paying no wealth tax/income tax on their colossal assets/incomes.

Fair and equitable taxation policies should be devised as envisaged in Article 3 of the constitution: “The State shall ensure the elimination of all forms of exploitation and the gradual fulfillment of the fundamental principle, from each according to his ability to each according to his work”. In addition, a government needs to revamp the entire tax system – use taxation as a tool for economic development rather than collecting money for luxuries of the rulers. Besides this, a government should embark upon progressive income and corporation taxes for subsequent enforcement – a system in which the rich are liable to pay higher rates of taxes while everyone else pays tax as per their means. It is the responsibility of government to abolish general sales tax to Zero rate – a discriminatory indirect tax shifting the burden from unaffordable by ending the tax havens.