‘Tax evasion in Pakistan audacious, confounding’

Last Updated: Friday, October 5, 2012 - 11:33

Islamabad: Tens of thousands of Pakistan`s wealthy are not paying their taxes, revealing "how large and how audacious the picture of tax evasion" is in Pakistan, said a leading daily Friday.

An editorial in the Dawn said there are times "when the audacity and mismatch between what is being said and what is being done leaves us all dumbfounded".

The National Database and Registration Authority has completed an exercise aimed at identifying those individuals who have lifestyles of opulence and luxury yet pay no taxes.

"The results strain credulity, in a country where credulity is already in short supply.

"Tens of thousands of people live in posh areas of big cities, own luxury cars, engage in lucrative professions such as medicine and law and possess licenses for weapons - yet they pay no taxes. Over a million and a half people travel abroad multiple times in a year, and more than half a million people own multiple bank accounts without being registered as tax payers," said the daily.

It said that the "audacity of living in this manner without paying taxes, and in many cases without even being registered with the tax authorities, is confounding even for Pakistan".

"We all knew these numbers would be large when they came in, but we weren`t prepared for how large and how audacious the picture of tax evasion in Pakistan really turned out to be," it added.

The editorial went on to say that Pakistan has one of the highest cash-to-bank deposit ratios in the world, which means that Pakistanis prefer holding their wealth in cash, and prefer to execute their transactions in cash rather than use banking channels.

"The reason is obvious: cash transactions are difficult to trace. The volume of money that circulates in the cash economy in Pakistan is larger than it is in most other countries of the world," it said.

This money will come into the tax net, when there is a "will to connect the dots and identify the evaders on the part of the Federal Board of Revenue, when there is a will to document commercial transactions through a value-added tax, and above all, when there is a will on the part of citizens to change their mindset and carry their part of the burden to pay for their state`s expenses", said the editorial.


First Published: Friday, October 5, 2012 - 11:33

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