HARASSMENT of taxpayers by the FBR is wrong, illegal and unacceptable. But equally wrong, illegal and unacceptable is the widespread tax theft by the wealthy and powerful. For some years now, the FBR has been serving notices on people, including traders and others, to ensure they start to regularly pay taxes on their incomes and file their returns. A senior FBR official told a parliamentary panel recently that just over 10pc of nearly 13m people who were served tax notices in the last three years had responded and started filing their returns. The FBR had raised a tax demand of Rs64.3bn through these notices but ended up recovering just Rs2.6bn. How does a campaign by the tax authorities to ensure tax compliance by non-filers amount to harassment of taxpayers as alleged by the members of the parliamentary panel?

The intervention of parliamentarians across the political divide on behalf of the tax delinquents and equating tax notices with harassment will weaken the already feeble writ of the tax machinery, which is reflected by the majority of people ignoring tax notices. It also amounts to encouraging a culture where people, especially powerful business lobbies and big farmers, either don’t have to pay their taxes or can get away with paying a meagre sum. In a country where 3m people file their tax returns and where the tax-to-GDP ratio of close to 10pc remains one of the lowest anywhere, parliamentarians are sending the wrong message by supporting tax evaders. There’s no doubt that the FBR is inefficient and allegedly corrupt, and its functionaries are notorious for resorting to high-handed tactics to extort money from taxpayers. But stopping it from doing its job is not the answer. The solution lies in reforming the tax machinery through the extensive use of technology to minimise contact with taxpayers, cut the discretionary powers of taxmen and hold the latter accountable to taxpayers. Simultaneously, the taxpayers’ complaint remedial mechanism needs to be strengthened and the fear of stern action instilled among tax dodgers.

Published in Dawn, July 11th, 2021