That the taxation system is in urgent need of overhaul is beyond any doubt. Headlining the problems that beset the area are two issues: a grossly low tax-to-GDP ratio and a regressive tax structure that burdens the poor more than the rich. But there are a host of other problems, ‘leakages’ that drive down tax collection, that need to be addressed and in this regard the World Bank has recommended several sensible, pragmatic steps that should be given serious attention by the government.

Take the issue of the ‘harmonisation’ of tax procedures. At the moment, income and sales taxes and duties are recovered separately from a business by the tax commissioners and there is a ‘wall’ between each of those tax departments that prevents the authorities from developing a complete profile of the business. This is believed to contribute to lower tax collection. If, for example, a business is paying large amounts of import-related duties, which indicates a high-level of business activity, but only small amounts of sales tax, the authorities at the moment are often unaware of such paradoxes that need to be investigated.

So harmonisation of the tax-collection system is needed. Unfortunately, as reported yesterday, the World Bank has suggested that the government bypass parliament and promulgate changes in the tax system of the country through a presidential ordinance. The government should reject this advice. Ordinances are expedient because they require the assent of just one person, the president, as opposed to being voted on by houses of 342 and 100 members, the National Assembly and Senate respectively. But ordinances are not a good way of making good law. Yes, parliament is a cacophonous place in which important legislation can get bogged down or watered down, but bypassing it routinely, as all governments have inevitably done, runs contrary to the objective of capacity-building of our institutions.

In any case, the Constitution limits the life of an ordinance to 120 days and the courts have ruled that the life of an ordinance cannot be extended by re-promulgating it near its expiry date. So parliament cannot be kept out of the loop if the changes to the tax system are to be made permanent. We are witnessing something similar at present as the government has had to take to parliament, as a result of the PCO judges case, over three dozen ordinances promulgated by Gen Musharraf (retd). Parliament alone should decide the country’s tax laws.