| 13 November 2004 | Saturday | 29 Ramazan 1425 |
Welcome Indian move
In bad taste
In its efforts to widen the tax net in the country, the Central Board of Revenue is focusing on raising the number of registered sales taxpayers in the country, which currently stands at about 88,000.
This number is far lower than what it should be, given the size of the market and the economy. To this end, a number of special cells are being set up at the CBR which will register new taxpayers and identify cases of evasion.
It is believed that thousands of businessmen and professionals do not fully document their income with the result that they pay a fraction of what is due. Part of the problem here is that tax officials are involved in this practice and support the system in place as this offers opportunities of corruption for them.
Keeping this in mind, any move to widen the tax base should start with the CBR putting its collection machinery in order. At the same time, a comprehensive survey must be carried out to update government records so that those eligible to pay sales tax are identified.
In the past, similar moves were met with stiff resistance from trade bodies and business associations. The CBR needs to sit down with these organizations and convince them of the need to widen the tax base. Any resistance from them only leads to turning public opinion against the CBR's move.
A broader tax base can be linked to reducing the tax rates prevailing in the country as well as withdrawing surcharges from utility bills. About Rs80 billion is collected annually as surcharge from utility bills.
These could be given back to consumers once the tax base is broadened, resulting in more revenue collection through direct channels. For this to happen, there should be at least three million income taxpayers in the country, as against the present 1.7 million.
Under the present circumstances, the limited number of taxpayers in Pakistan has meant that the government has increasingly relied on indirect taxes to raise revenues. This in turn results in inflationary pressures.
Widening Pakistan's narrow tax base has been a challenge that most governments have not been able to meet despite all intentions - and compulsions - to do so. The two issues that continue to affect tax collection are the lack of political will on the part of the government to go after tax evaders and the inability to check the prevalence of corruption in the CBR.
One encouraging development is that overall tax collection, including sales tax receipts, rose by over 13 per cent in the first quarter of the current financial year. Given the ambitious target of Rs249 billion set for sales tax in the current financial year, it will be possible to achieve this objective if the right steps are taken by the CBR.
An integrated approach towards making the CBR more efficient as well as introducing laws that would allow the agency to sustain these reforms should be a priority. If this is not done, and the tax base remains as at present, there is a danger that economic progress would stagnate or else the government would have to resort to heavy borrowing as was done in the past to meet its growing needs.
Welcome Indian move
Pakistan has done well to welcome Indian Prime Minister Manmohan Singh's announcement that New Delhi has decided to reduce the number of troops in occupied Kashmir. Prime Minister Shaukat Aziz, the foreign office and the military's spokesman have all welcomed Mr Singh's announcement made on Thursday before the Indian premier starts a visit to the disputed territory.
Even though he did not give details of the proposed reduction, the move should be seen as part of the on-going peace process between Pakistan and India. The decision should help strengthen the cordial atmosphere that at present characterizes Indo-Pakistan relations.
While the Pakistan foreign office spokesman said Islamabad would be looking forward to a "physical manifestation" of the announcement in the days and weeks to come, the military spokesman said Pakistan welcomed it as a confidence-building measure.
The decision to reduce troops, however, could be reviewed if, in the words of the Indian prime minister, the "levels of infiltration and terrorist violence" increase. Mr Singh also alleged that "the infrastructure of terrorism" across the Line of Control still existed. Taking note of this "baseless contention", the foreign office said "a good CBM" should not have been "sullied" with such allegations.
The Indian move comes in the wake of the proposal made by President Pervez Musharraf for the demilitarization of the various zones of Kashmir. A scaling back of the Indian army's oppressive presence in the territory has also been long advocated by peace activists as a step towards finding a Kashmir solution.
Mr Singh's announcement, therefore, deserves to be studied carefully. If implemented, the move could help improve the atmosphere in the occupied territory and indicate New Delhi's readiness to engage the Kashmiri leadership in a dialogue.
Regrettably, in spite of the relaxed atmosphere in Indo-Pakistan relations, the situation in the valley remains grim. Indian security forces are still engaged in human rights abuses, the rape of a Kashmiri girl and her mother recently being just one such example.
Let us hope that New Delhi will pay attention to this aspect of the situation. This would be possible by reining in Indian troops and taking action against personnel found involved in HR abuses.
Pakistan will look forward to the proposed reduction in troops in occupied Kashmir and hope that the process of detente will continue to be pursued by the two sides with sincerity.
In bad taste
The world's outpouring of grief and sympathy for the Palestinian people at the death of Yasser Arafat was in stark contrast to the reaction conveyed by Israel. Tel Aviv abstained from the UN General Assembly's condolence session, and one Sharon minister went as far as to 'welcome' the departure of Arafat from the scene.
This smacks of the hatred and contempt that the current Israeli leadership has for the Palestinians. Little does it realize that Arafat's death has created a void that his successors will find hard to fill, especially in the face of the growing popularity of radical Islamists.
The rancour shown by Tel Aviv at this crucial time finds no parallel in the culture and history of the region. It reminds one of the European hatred of the Jews which forced them to emigrate from what were their native countries.
It was bad enough for Tel Aviv to have confined the late Palestinian leader to his Ramallah headquarters in his last years. Worse, in its arrogance, Israel refused to grant the departed leader's last wish - he be buried in Al Quds. Had better sense prevailed, it would have extended the olive branch to the Palestinians at this hour of grief by making a conciliatory gesture.
But that could hardly be expected of a regime that has been bulldozing and bringing down brick by brick the edifice of peace that was being raised in the aftermath of the Oslo peace accords. It is time Israel realized that attempts seeking to discredit the Palestinian leadership will only further the stream of radicalization in the region and serve no one's interest.