Tax evasion by Pak elites helps spread insurgency
Tuesday, 20 July 2010
From Fazle Rashid
NEW YORK, July 19: Widespread tax evasion by the wealthiest in Pakistan have helped spread insurgency that is tormenting the country and complicating American policy in the region, claimed New York Times in a front page story today.
The absence of a workable tax system has festered inequality in Pakistan where the wealth of its most powerful members is never put to use for public good. That is because the politicians who make the rules are skilled at finding ways to exempt themselves, NYT report said
Insurgency has been a good cause for external assistance. Pakistan is among the largest recipients of the American aid, payments of billions of dollars that prop up the country's finances and which are meant to fight the insurgency. Islamabad has made several attempts at expanding the tax-net but stock market, real estate, agriculture, a major money maker for the landed aristrocracy remain largely untaxed.
This is a system of the elite, by the elite and for the elite, the NYT quoted a retired tax official as saying. A member of parliament is Pakistan is worth $900,000. Pakistan's opposition leader Nawaz Shareef, one of the richest persons in the country has paid no personal tax for past three years. Any income over $3488 is taxable in Pakistan. Only two percent of Pakistan's 170 million people pay tax making Pakistan's revenue from taxes among the lowest in the world.
Pakistan and Afghanistan, in the meanwhile, concluded a landmark trade agreement yesterday, auguring a thaw between two permanently suspicious neighbours and handing the Obama administration a rare victory in its beleaguered war effort in Afghanistan.
The trade accord was signed at the behest of the United States. The agreement is likely to bolster a sagging Afghan economy. The agreement covers a multitude of trade and transit issues, ranging from import duties to access to ports and curb smuggling.
Bringing Islamabad and Kabul closer has been an avowed goal of the present US administration. The US used a visit by secretary of state Hillary Clinton to Islamabad and an international conference in Afghanistan beginning tomorrow to "nudge both sides across the finish line" A beaming Clinton watched the two commerce ministers signing the accord.
The United States will build a modern 60-bed hospital in Karachi and help Pakistani farmers to export mangoes to America. America would provide financial assistance to Pakistan in public health, water distribution and agriculture. The US assistance will be to the tune of $500 million. America harbours great suspicion about Pakistan's commitment to root out Talebans and Islamabad's nuclear programme.
Pakistan plans to buy two nuclear reactors from China, a deal that alarms the US because 'it is cloaked in secrecy and is being conducted outside the global non-proliferation regime.' India and Pakistan are not signatories to nuclear non-proliferation treaty.
NEW YORK, July 19: Widespread tax evasion by the wealthiest in Pakistan have helped spread insurgency that is tormenting the country and complicating American policy in the region, claimed New York Times in a front page story today.
The absence of a workable tax system has festered inequality in Pakistan where the wealth of its most powerful members is never put to use for public good. That is because the politicians who make the rules are skilled at finding ways to exempt themselves, NYT report said
Insurgency has been a good cause for external assistance. Pakistan is among the largest recipients of the American aid, payments of billions of dollars that prop up the country's finances and which are meant to fight the insurgency. Islamabad has made several attempts at expanding the tax-net but stock market, real estate, agriculture, a major money maker for the landed aristrocracy remain largely untaxed.
This is a system of the elite, by the elite and for the elite, the NYT quoted a retired tax official as saying. A member of parliament is Pakistan is worth $900,000. Pakistan's opposition leader Nawaz Shareef, one of the richest persons in the country has paid no personal tax for past three years. Any income over $3488 is taxable in Pakistan. Only two percent of Pakistan's 170 million people pay tax making Pakistan's revenue from taxes among the lowest in the world.
Pakistan and Afghanistan, in the meanwhile, concluded a landmark trade agreement yesterday, auguring a thaw between two permanently suspicious neighbours and handing the Obama administration a rare victory in its beleaguered war effort in Afghanistan.
The trade accord was signed at the behest of the United States. The agreement is likely to bolster a sagging Afghan economy. The agreement covers a multitude of trade and transit issues, ranging from import duties to access to ports and curb smuggling.
Bringing Islamabad and Kabul closer has been an avowed goal of the present US administration. The US used a visit by secretary of state Hillary Clinton to Islamabad and an international conference in Afghanistan beginning tomorrow to "nudge both sides across the finish line" A beaming Clinton watched the two commerce ministers signing the accord.
The United States will build a modern 60-bed hospital in Karachi and help Pakistani farmers to export mangoes to America. America would provide financial assistance to Pakistan in public health, water distribution and agriculture. The US assistance will be to the tune of $500 million. America harbours great suspicion about Pakistan's commitment to root out Talebans and Islamabad's nuclear programme.
Pakistan plans to buy two nuclear reactors from China, a deal that alarms the US because 'it is cloaked in secrecy and is being conducted outside the global non-proliferation regime.' India and Pakistan are not signatories to nuclear non-proliferation treaty.