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“One for you, Nineteen for me”: On Politicians and Taxes

“One for you, Nineteen for me”: On Politicians and Taxes

So today, the Center for Investigative Reporting in Pakistan (CIRP) launched a report on current levels of tax evasion amongst parliamentarians in Pakistan. The author of the report, who also happens to be the head of this new center, is Umar Cheema – a Jang group journo who previously found himself on the wrong-side of the military/intelligence agencies.

The report itself doesn’t reveal anything particularly shocking. Yes, most of our politicians – 60% to be precise – don’t pay taxes. The figure is probably in line with current levels of tax evasion amongst those who should be paying taxes in general. Only 260,000 people (out of 180 million) have bothered to file an income tax return for three years running, which is probably why our tax-to-GDP ratio is 9.3%. Most Traders, for example, currently busy making a killing off a consumption boom in Pakistan don’t pay income tax and actually threaten to burn down FBR’s office when asked to do so.

 

Unhappy at being asked to file income tax returns (source: Pakistan Today)

 

Paying taxes is a good thing. Let’s be clear about that much. For a country which needs a lot of money for infrastructure development, for rolling out social development programs for 180 million people, or more simply, to stay afloat, there’s just not enough revenue generation. Add to that, we’re allocating huge chunks of our budget to debt servicing, to the protection of our ideological and geographic frontiers, and to non-development expenditures in the way of salaries, pensions, and benefits for state employees. (For those interested in an exact breakdown of where the federal government budget  gets spent and how, this paper by Dr. Asad Sayeed and Mysbah Balagamwala is a great primer – pdf).

Coming back to the subject at hand though, the actual act of revealing how parliamentarians aren’t paying taxes has most probably been done to improve ‘transparency’, ‘accountability’, and to provide citizens with information on what their representatives are up to. In one way, it’s asserting that if you’re a parliamentarian, or a politician in general, you’ve basically given up your right to privacy simply by virtue of your career choice.

The intentions behind this report are, most probably, very noble. Publishing such information is seen as a way of holding representatives accountable through naming-and-shaming, and it’s a way of catalysing greater respect for rules and laws (tax regulations, in this case) within our political culture. So my issue is not with the intention itself, but rather with the (inadvertent) consequences of such ‘advanced’ methods of accountability in a relatively infantile democratic culture such as ours.

Simply put, does this manner of naming-and-shaming actually induce political maturity in Pakistan?

For starters, the report is in English and deals with the rather sophisticated subject of taxation. Most people in the country, literate or otherwise, rural or urban, wouldn’t know how taxes are calculated in the first place. All they’ll hear, and this is more true for the largely urban audience this report is automatically catering to, is that politicians have been doing something illegal.

Considering the baseline opinion that the urban,English-understanding, media-consuming segment already has of politicians, this report is simply re-affirming that our political class is full of incompetent thieves.

In a country like India, where the electoral sphere is largely rules-based and conforms to entrenched norms and procedures, a pro-accountability campaign resulted in the rise of Hazare and Kejriwal, where the latter had no option but to form a political party. In Pakistan, the calculus is completely different because a) the electoral sphere is not rules based, b) there are multiple non-electoral actors who occupy a lot of political space, and c) media, and urban opinion in general, holds disproportionate ability to empower non-electoral actors (see PNA movement of 1977).

With a fair degree of certainty, I can say that nobody in Yaqoob Bizenjo’s constituency (NA-272 Kech-cum-Gwadar) particularly cares about his or her representative’s tax paying record. That’s the least of his or her concern, and that’s not the yardstick he or she uses to assess his performance. A lot of people might think that’s wrong and ‘backward’, but that’s the country we live in, and that’s how electoral politics functions in it. What this report does, and inadvertently at that, is that it fortifies a pre-existing anti-politician bias within urban centers, it further stacks the odds against electoral actors in the elite-politics sphere, and it creates a needless media spectacle.

I know a lot of you will disagree with the gist of this, but i think it’s important to highlight what constitues effective accountability and whether it should be selective in its application. Yes, politicians are representatives and they should be held to a higher standard than the rest of our non-tax paying elite, but given the nature of our political sphere, wouldn’t it be sensible to apply the same principle to actors who hold political power without being representatives of any kind. The quintessential response to this is that ‘oh since we had elections, we’re a democracy, and army and the courts are simply minding their own business’, which is BS  because having an election in 2008 doesn’t reverse 64 years of institutional imbalance.

This imbalance, in my humble opinion, has to be rectified through uncomfortable stuff like flaunting stories about the corruption of a judge’s son, and about plots being distributed like candy to retired ideological-frontier guardians. If politicians as a class and politics as a profession can be ridiculed and dirtied every day, i don’t see why the same can’t be done for other institutions and actors who’ve actually had a greater share of Pakistan’s pie.

 

 

About Umair Javed

Umair is a political economy researcher based at the Center for Economic Research in Pakistan (CERP).

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