By special correspondent
Pakistan’s federal government published its parliamentarians’ tax directory this week, revealing that many major figures in Pakistani politics paid minimal tax in 2019 and many paid no tax at all, highlighting deep flaws in a taxation system that has drawn repeated criticism from Western aid donors.
Pakistan’s inability to raise revenue has constrained government spending, depriving schools and hospitals of funds and exacerbating energy crises over the years, causing widespread hardship in the nuclear-armed country of 220 million people, Arab News has reported.
Western allies have poured billions of dollars in aid into Pakistan, but the funds have not been nearly enough to plug the huge gap between members of the elite, who often pay little tax, and the poor who desperately need the public services that taxes should fund.
The Federal Bureau of Revenue, the country’s national tax collection authority, published the Parliamentarians’ Tax Directory 2019 on January 3. The report highlights one of the reasons why Pakistan has failed to improve its tax collection rates: politicians benefit from a lax regime.
“FBR has been publishing Tax Directories of Parliamentarians for the last six tax years,” finance minister Shaukat Tarin said in the foreword to the tax document.
“But this time, in line with the government’s reform agenda, special efforts have been made to render the Directory more informative, with a clearer picture of the state of affairs, which will help not only in educating the taxpayers but also in encouraging compliance with tax laws as a national duty.”
According to the directory, which has been tabulated from returns filed manually and electronically till January 3, opposition politician and former prime minister Yousaf Raza Gillani, who belongs to the Pakistan People’s Party (PPP), paid zero income tax and Rs12 million agriculture tax, Senator Khalida Ateeb paid Rs315 income tax, Punjab Chief Minister Usman Buzdar Rs2,000, Mahmood Khan Rs66,000, and Khusro Bakhtiyar Rs1.5 lakh tax for the year 2019.
Ninety-three parliamentarians did not file tax returns during 2019 while the computerized identity cards of 63 parliamentarians are missing from their returns.
Among the highest tax payers were Prime Minister Imran Khan, who paid Rs9.8 million, Pakistan Muslim League-Nawaz (PML-N) President Shehbaz Sharif Rs8.2m, former president Asif Ali Zardari Rs2.2m and PPP chairperson Bilawal Bhutto Rs5.35m.
Other politicians who paid income tax in the crores, or millions, include Finance Minister Shaukat Tarin, who paid Rs26.6 million, PTI MNA Najib Haroon who paid the highest tax of Rs147 million and Jamiat Ulema-e-Islam-Fazl’s (JUIF) Talha Mahmood who paid Rs32.2 crore as income tax.
Other notable mentions were senior PML-N leader Ahsan Iqbal who paid Rs55 lakh as income tax in 2019, PML-N’s Azam Tarar Rs25.4 lakh, Asad Umar Rs42.7 lakh, Faisal Vawda Rs11.62 lakh, Human Rights Minister Shireen Mazari Rs3.71 lakh, former prime minister Shahid Khaqan Abbasi Rs48.71 lakh, Khawaja Saad Rafique Rs2.69 lakh, Rana Sanullah paid Rs29.94 lakh, Saeed Ghani Rs7.02 lakh, Shazia Marri Rs39,761 and former Senate chairman Raza Rabbani Rs 15.55 lakh.
Former president Asif Ali Zardari declared the highest agricultural income in the National Assembly at Rs136.048m while his son, Bilawal Bhutto-Zardari, declared Rs29.666m as agricultural income.
Foreign Minister Shah Mahmood Qureshi paid income tax of Rs851,955, agriculture tax Rs350,000, presumptive tax Rs42 lakh and showed a total income of Rs37 lakh. Minister for Information & Broadcasting Fawad Chaudhry paid income tax amounting to Rs136,808.
Minister of State on Information and Broadcasting Farrukh Habib paid Rs405,477, Federal Minister for Aviation Ghulam Sarwar Khan paid income tax of Rs12 lakh and agriculture tax of Rs520,000, Defense Minister Pervez Khattak paid income tax of Rs12.5 lakh, Minister for Interior Sheikh Rashid paid income tax of Rs557,450 and agriculture tax Rs324,667 and Minister for Science and Technology Shibli Faraz paid income tax of Rs885,451 for 2019.
Huge swathes of the economy, like agriculture, have been virtually exempt from taxes over the years. Specially designated products also benefit from “zero-ratings” and are not subject to any tax, something that the IMF wants Pakistan change if it wants to revive a stalled $6 billion loan package approved in 2019.