The question of refunds

THE Central Board of Revenue (CBR) is considering meeting the long-standing demand of the exporters regarding payment of at least 50 per cent of their tax refunds before the commencement of the cumbersome and time-consuming exercise of audit for verifications of claims and the balance after the conclusion of the process. A promise to the effect was held out the other day by Vakil Ahmad Khan, member (direct taxes), of the CBR. He has, however, qualified this promise by saying that this concession would be available only to the ‘good exporters’. He did not elaborate what he meant by the term ‘good exporters’ but a safe assumption would be that he had in mind those exporters who did not resort to the practice of filing false and exaggerated claims. The CBR is now said to be engaged in developing profiles of exporters fit to be listed as ‘good exporters’ who would get 50 per cent refunds pre-audit. Once this exercise is over, hopefully those with a clean bill of health would get their refunds without delay. The practice of filing false claims by the unscrupulous ones has, indeed, done a lot of harm to the country’s ability to gain the most from its export trade in a given year. One rough estimate has put the total annual average of the refunds payable to the business community at about Rs 200 billion. Out of this only about Rs 50-70 billion is actually refunded by the CBR in an average year. This has subjected the business community to severe resource constraints year after year for no fault of theirs and which in turn has restricted their ability to export more.

Another aspect of the situation is the chronic inefficiency and corruption within the CBR which has compounded the problem affecting exporters. The exchequer has lost billions of rupees to fraudulent claimants of refund over the years either because of the inefficiency of the auditors or because of their collusion with dubious claimants. The government has already constituted a committee to look into the problem of delays in the release of refunds to the exporters. The committee is expected to submit its report within one month. As Mr Vakil Ahmad Khan admitted, the release of refunds to the exporters is often delayed mainly because of the cumbersome method of verification of claims. It is, indeed, at this stage that most of the complications start, resulting in either delays or release of undeserved refunds. So, the objective of the CBR should be to make the process of verification simple and less time-consuming rather than going into the character, integrity and reputation of the exporters, which, in our given circumstances, may prove an equally futile exercise. Also, the CBR should in future avoid the practice of delaying the release of refunds only to inflate its own net collection targets within a given period. Indeed, the working norms and principles of the CBR itself needs to be changed for better performance in this and other spheres. Over the years, the CBR has developed the habit of holding the purse strings of its collections too tightly to think of even overdue disbursements and refunds, thereby affecting trade and commerce whose role is vital to higher revenue generation.

Wrong criterion

DESPITE serious reservations expressed by the media and political parties, the government has come up with a controversial law regarding the minimum educational qualification of future parliament member. Promulgated on Saturday by the president, the Conduct of General Elections (Amendment) Order 2002 debars a person from being a member of parliament if he is not a college graduate. As was only to be expected, the PPP and the PML — the parties which won the last four general elections — have criticized the law. More ominously, they have accused the government of “pre-poll rigging.” While one need not doubt the government’s intentions, it is obvious that the law does not seem to take into account the intricacies of the political process. A parliament is a forum of elected representatives of the people who are supposed to be well acquainted with the problems and aspirations of their constituencies. Voters send them to parliament not because of their educational qualifications but because they have the right credentials and they have faith in them and expect them to articulate the people’s grievances and solve their problems. For that reason, a politician with a college degree may indeed fail in his duty if he does not know his electors’ minds and is unaware of their problems and aspirations. On the contrary, a politician who is from amongst the people would do a better job even if he is not a graduate. What matter are the quality of his commitment as a public representative, his equation with the people, his understanding of the intricacies of policies and decisions on public well-being and his dedication to the interests of his electors and to those of the nation at large.

History bears witness to the fact that some of South Asia’s outstanding politicians did not have the benefit of a college education. If the idea behind the present law is to improve the quality of parliamentarians, this is likely to prove a handicap rather than a help, especially in the context of our vast feudal and tribally dominated rural hinterland. There are many people outside the domain of these dominant interests and fit to represent the interests of the common people will find themselves excluded on the technical ground of being non-graduates.

Quake disaster in Iran

SATURDAY’S devastating earthquake that hit the northern Iranian province of Qazvin left over 220 people dead and several thousand homeless. The intensity of the quake was measured 6.3 on the Richter scale. Besides completely wiping out some twelve villages, the tremor and its aftershocks have trapped hundreds of survivors under the rubble who are still being pulled out by Iran’s Red Crescent rescue workers. It is heartening to note that in this hour of grief and tragedy, the United States has sent a message of sorrow and goodwill to the people of Iran, and offered to join the rescue and rehabilitation efforts. President Musharraf, for his part, has also condoled with his Iranian counterpart the loss of life and property on behalf of the government and people of Pakistan.

Iran is one of those earthquake-prone countries that experience this natural calamity at regular intervals. The entire region comprising the greater Turko-Persian plateau — from the Black Sea in the west to Afghanistan and Balochistan in the east — lies on active geological fault lines that cause hundreds of low to moderate-intensity tremors almost every year. Quakes of higher intensity are also regular occurrences, though mercifully, they are not very common. The most fatal and recent ones to hit the region were in northwestern Turkey in 1999, which left over 15,000 people dead, and then in northern Afghanistan in March this year leaving 4,800 dead. Unfortunately, there is no way to predict an earthquake well in advance to be able to make prior arrangements to minimize damage and loss of life before the disaster strikes. One can only hope and pray and sympathize with the stricken people and families. In this hour of grief, the Pakistanis join their Iranian brethren in their prayers for the survivors of the current quake.