Historically, almost every government in their tenure took the easy route and raised taxes for those who were already in tax, especially the salaried class. They never try to tax powerful social elites who have continuously evaded taxation including retailers, agriculturists, real estate owners, and service providers. Social elites among them are mostly not in the tax net. A low tax rate has been imposed on real estate but then government officials and the employees of federal and provincial governments have been exempted from these taxes. Are private citizens liable to pay more taxes than officials and social elites? (Social elite here refers to the powerful individuals who have the capacity to legitimize political authority within the central government and act as a ‘proto-state’). Is the state not supposed to look after the taxes of its citizens and where they need to be allocated? However, on the opposite the punishment for tax evasion has been raised, and the powers of FBR officers have been increased when everyone knows that, along with the police. According to the FBR Ordinance, a twenty-thousand-rupee fine is mandatory for those who do not declare income tax annually and those not showing their business NTN number will pay five thousand penalties accordingly. There is an ongoing list of penalties for salaried classes.    

Tax evasion is seen evidently in the real estate sector, which was ‘the parking lot’ of untaxed money. “There is a strong institutional loophole that gradually developed a system to officially untaxed money. The real estate has got perpetual amnesty in the country.”  The government should discourage the business of the “files” of the plots. As under this plot files system, there could not be any checks on real estate money and you could not even tell who and who were the owners of the plots there. When plots became parking lots, they got out of reach of the poor sections of society. I suggest that “if construction is not done on a plot of land, it should be confiscated”. Also, the judges are not experts at finance, and ceased economics is the reason for the mess of all corporate and tax cases as well as a large number of cases.

The inequity does not end here. Every government has made no effort in the budget to cut its expenses. Most non-productive expenditures have increased. Hundreds of billions of rupees in subsidies are given to privileged sectors (social elites) and groups, government employees are given free electricity and petrol, and hundreds of billions of rupees worth of perks and privileges, including cars, houses, subsidized travel and club fees, are given to the privileged. All the while the poor struggle even to pay their electricity bill.

The rot runs deeper. The salaried and those in the tax — direct and indirect — net, pay about half or more than half of their income in taxes. And what do they get in return? Nothing at all. They have to send their children to private schools, they have to go to private hospitals if they fall sick. If they want safe drinking water, they have to buy bottled water. Law and order is poor, justice is hard to even access, and the police and the army act as if citizens are criminals. Despite paying through their nose, citizens get load-shedding and lectures from the government about the virtue of sacrifice.

Every sector has to pay at least 25 % tax but the manufacturing sector is paying the most taxes. The entire burden of taxes is on the manufacturing sector which amounts to 70 % and tax generation from other sectors is not up to the mark and is lowest.  The Government of Pakistan has to improve and increase tax collection on an immediate basis.