| 02 July 2004 | Friday | 13 Jamadi-ul-Awwal 1425 |
Gimmick and reality
Vehicle theft
Achieving its revenue collection target of Rs510.6 billion for 2003-04 is a milestone for the Central Board of Revenue. The increase in tax collection by 10.9 per cent over the previous year is encouraging and raises expectations that the target of Rs580 billion set for 2004-05 will also be realized.
However, Finance Minister Shaukat Aziz has warned that this would only be possible if conditions remain peaceful and the growth target of 6.6 per cent for the economy is maintained.
At a press conference on Wednesday, the finance minister pointed out that frequent strikes in Karachi in the month of May cost the national exchequer over Rs1.5 billion a day in unearned revenue, resulting in the month's tax collection falling behind the target.
This underlines the need to improve the law and order situation in the country, particularly in Karachi, so that business activity can go on uninterrupted. At the same time, the proposal to double the tax base to 2.4 million taxpayers is ambitious.
Budget planners must be aware that this move will come up against strong resistance. Past efforts to bring all tax evaders within the net have led to protests from traders and shopkeepers as well as inaction from a section of CBR officials.
These officials benefit from the present system of a virtually frozen list of taxpayers. Successive CBR chiefs have complained that they do not have the power to move against these errant officials.
That is why any move to widen the tax base must also include an autonomous status for the CBR with adequate powers to manage its own affairs without any interference from any ministry and to deal with cases of tax evasion, enlistment of new taxpayers and enforcement of tax laws generally.
An integrated approach to making the CBR more efficient as well as to framing laws that would make it possible for it to sustain these reforms should be part of the plan to widen the tax base.
Simplification of tax laws, self-compliance and minimizing the contact between taxpayers and the collectors are equally important. The higher tax collections in 2003-04 were primarily the result of enhanced economic activity in the country and not of any determined tax drive.
This has prompted the State Bank to comment in its quarterly report that the targets should have been revised upwards. Regardless, the challenge now is not only to meet the coming year's target but to widen the tax base.
A broader tax base can result in reducing the tax rates prevailing in the country as well as withdrawing surcharges from utility bills. There should be at least three million taxpayers in the country as against the present 1.2 million.
The limited number of taxpayers has meant that the government has increasingly relied on indirect taxes to raise the required revenue. However, the current practice of generating a large part of the revenue through customs duties and tariffs is no longer sustainable in view of lower tariff rates being insisted upon by the World Trade Organization.
The emphasis has therefore to shift to the efficiency of collection and widening of the tax base rather than high tariff and tax rates. A serious drive was mounted some years ago to bring retail trade within the tax net.
But the initiative proved abortive in the face of stubborn resistance from that section of traders. With better planning and a more powerful CBR, the process may have to be repeated in order to widen the tax base and to meet the growing need for revenue earning.
Gimmick and reality
The Israeli supreme court ruling on the "security barrier" only legitimizes this monstrosity; it does nothing to stop its construction. On Wednesday, the court ordered that the route of the fence - the Middle East's Berlin wall, as Mr Yasser Arafat calls it - be altered to accommodate the convenience of some 35,000 villagers.
This way, the court verdict is meant to be a good publicity stunt. Zionist publicists will say, 'look how our courts are independent and never fail to address Palestinian grievances'.
However, at issue is not the convenience of the villagers affected by the barrier; the issue concerns the three million Palestinians who have been groaning under Israeli occupation for 37 years.
All UN resolutions - including 242 - have called for Israel's withdrawal from Palestinian territories, and all US-backed peace processes have upheld this basic principle. The Oslo peace process laid down a clear time-table for the withdrawal of Israeli forces from the West Bank and Gaza and for negotiations to begin for a final settlement of the status of Al Quds.
If Israel had been sincere, a final settlement would have been in place by April 13, 1999. However, that has not happened; instead, not only is Israel in illegal occupation of the Palestinian land, it is going ahead with plans to usurp more territory.
Under the Gaza disengagement plan, Israel will dismantle Jewish settlements there, but it will retain major settlements in the West Bank. This is a violation of the US-led roadmap, which visualizes the coming into being of a Palestinian state by 2005.
But President George Bush torpedoed the roadmap when he announced that Israel would retain "some" West Bank land. Similarly, the fence intrudes into the West Bank and annexes more Palestinian territory within Israel.
The Israeli court's decision is a mere eyewash. If at all the Israeli court values truth and justice, it should order not a mere alteration in the wall's route; it should declare the entire fence a violation of international law and stop its construction. Palestinian Prime Minister Ahmad Qorei correctly said, "It is a racist separation wall and, therefore, it should fall."
Vehicle theft
The snatching of 41 cars and motorcycles - some at gunpoint - by criminal elements from various parts of Karachi on Tuesday point yet again to the growing menace of vehicle theft in the city.
The record number of vehicles stolen in the course of one day also points to the complete failure of the police and other law enforcement agencies in checking this crime. Moreover, it reinforces the existing public perception that a racket of this nature and proportion cannot go on without collusion between the criminals and elements within the law enforcement forces.
On an average, more than twenty vehicles are stolen from Karachi on a given day and most are taken out of the city, mostly to neighbouring Balochistan, within hours of the theft.
Is it not surprising that the police and levies should thoroughly search picnickers and their vehicles going out to the beach or to Hub Dam in the neighbouring province but fail to catch thieves getting away with their daily loot?
There was a time when the Citizen-Police Liaison Committee played an active role in curbing car theft and in helping to recover the stolen vehicles, but that does not seem to be the case anymore.
The menace has assumed alarming proportions and has turned into an organized crime by any standards. The multi-billion rupee racket has a number of stakeholders: influential tribal chieftains who protect criminal gangs that do the actual stealing and rogue elements among officialdom and law enforcement personnel who get their fat share in the booty.
This cannot go on unchecked. It is time the authorities took concrete steps to root out the menace. The city and the Sindh governments, together with the CPLC, must invest more of their time and resources in evolving an effective strategy to curb this organized crime.