Top Tax Contributors To Pakistan’s Economy – OpEd
Location of Pakistan and Pakistani Rupee coin.
No country can become a prosperous and welfare state unless it manages all its financial requirements both on development and administrative sides within its own financial resources.
Deficit in tax collection domain is one of the major problem faced by Pakistan since its inception and because of this the government is forced to borrow loans for virtually everything. As a result, there is less money in the budget to spend on the welfare and wellbeing of citizens.
There are many factors that led to this deficit in the tax collection in Pakistan. The federal cabinet highlighted the issue of a huge backlog of revenue cases and showed its greater concern relating to revenue collection amounting to trillions of rupees. A low tax base leads to low tax revenue. The Federal Board of Revenue (FBR) after a survey claimed that only 1% of Pakistanis pay taxes. The evaders include many billionaire companies and individuals in the country. To enhance the tax base, Pakistan needs more entities from the corporate sector to file the taxes. Mostly the people from the private sector use means to evade tax payments and as a result the poor people have to suffer. However, in this vicious circle of tax evasion there are still some institutions and organisations that contribute heavily to the national economy through payment of regular taxes thus setting a good precedent for others to follow.
One of these institutes is the Fauji Foundation. After 1947, proportionate share of the balance fund was transferred to Pakistan. Fund remained with the Government until 1953, when Rs 18.232 Million were transferred to C-in-C. In 1954, Fauji Foundation was founded as a “Charitable Trust” incorporated under “Charitable Endowment Act 1890.”
Fauji Foundation (FF) is rendering welfare to 9.9+ Million individuals, amounting to Rs 10 Billion per annum. It also provides jobs to a large number of civilians (70%), much more than retired service personnel (30%).
Fauji Foundation has contributed significantly to the national cause in the fields of industry, social development, employment opportunities while enhancing the national exchequer by paying considerable taxes. The commercial undertaking is contributing in overall economy of the country. In 2020/21, FF has deposited tax amounting to Rs 150 Billion in national treasury. FF has paid Rs 1 Trillion to the Government over the last five years as taxes and levies. Fauji Foundation is not enjoying any special privileges, and is playing by market rules and operating under relevant regulatory authorities.
Another organisation which is contributing to national development is Army Welfare Trust – AWT, is a financial and industrial group which seeks to provide stability and progress to the armed forces and the nation. AWT paid Rs 2.54 Billion as taxes during the period from October 2019 to Septemper 2020.
The data reveals some other private entities that pay heavy income taxes include the Oil and Gas Development Company Ltd (OGDCL) which paid Rs17.9 billion. It was followed by the Pakistan State Oil Company Limited (PSO). In the banking sector The United Bank Limited (UBL) paid Rs12 billion, while the Standard Chartered Bank (Pakistan) Ltd, Rs4 billion. If all commercial and business organisations and institutions continue to pay their fair share in the taxes domain, government will be much facilitated in terms of revenue collection to run its economic and financial affairs.
Humais Sheikh is an independent Defence Analyst based in Islamabad. He has completed his Masters in Defence and Strategic Studies from Quaid-I-Azam University, Islamabad.
Pakistan’s Defense Budget In The South Asian Region – OpEd
Military truck carrying intermediate-range ballistic missile of Pakistani army, November 27, 2008 (Courtesy SyedNaqvi90)
By Jawad Ahmed
Montesquieu was a sociologist and political scientist of the eighteen century who believes that geographical location of an area will have implications for its habitants. Pakistan is the country located in the geographical line with having security challenges and a chronic crisis in its neighbour.
Newly independent countries at the end of World War II had no option but to go under the umbrella of one of the global power to safeguard their national interest. Being a colony of British’s, Pakistan naturally adopted US camp. Soon after independence Pakistan faugh war of 1948 with India and then war of 1965 and 1971. Kashmir remained the bone of contention between bot the neighbours resulted in wars and then ultimately an unstoppable strategic battle between both the countries.
Russian invasion of Afghanistan and later US “War on Terror” and its attack on Afghanistan once again brought instability in the region. In August 2021, US and NATO forces left Afghanistan yet the country is suffering at the hands of lack of resources and crisis of governance with non-actors like TTP.
South Asian region is a closely located region with porous border where insurgency travels and incidents of one country directly affects others. In this situation, Pakistan have been looking to get out from the label of security state to a normal state but repeated incidents of anarchy and security challenges in region does not allow Pakistan to do so. On Eastern side, Pakistan has India with a chronic Kashmir conflict and a history of wars. On Western side, Pakistan has Afghanistan which is struggling to survive on its own, non-state actors in Afghanistan remained a constant threat for Pakistan. Pakistan is facing attacks from the terrorists operating from the other side of border in its area of erstwhile FATA and Afghanistan. During this scenario, Pakistan Army fenced porous Afghan border through its resources to tackle the issue of cross border infiltration from Afghanistan.
Gabriel Almond a political scientist has said that the States are arranged in such a paradoxical order that willingly or unwillingly for their survival, they have to interact with each other. Pakistan in this situation is compelled to adopt a strategic outlook while looking into the strategic scenario of the region. Strategic gestures and stereotyping is necessary to deal and to hold a position to defend the national interest. Latest military trainings and equipment, research and experimentation, interaction with the allies and formation of new allies is the need for Pakistan. This is a constant process which requires proper expenditure yet Pakistan Armed forces are managing this within their limited resources.
Pakistan have been a weak economy over the recent years, corona pandemic, international conflicts i.e Ukraine war, global inflation and internal political instability has made it difficult for Pakistan to meet the requirement. Pakistan Armed forces has been successfully fulfilling their responsibilities in defending the country and dealing the pandemics within their limited resources.
On the other hand, India has a defence budget of $ 70 billion and Pakistan carries a defence budget of $ 11 billion, this depicts the huge difference in the amount of budget which India spends as compared to Pakistan. It is a fact that when it comes on spending on an individual soldier, India spends four times more as compared to Pakistan. On a single soldier, Pakistan spends around $ 13 thousand while India spends $ 42 thousand. India is third on annual defence expenditure in the World and this defense budget of India is seven times more than Pakistan. It has also been a challenge for Pakistan that India remained the second biggest importer of weapons between 2016-20.
Despite of constant increase in Indian budget and the constant challenges of the threats, Pakistan Army has not increased its budget in the last two years. Strategic needs of country were fulfilled through the available resources. Despite of economic difficulties, Armed forces of Pakistan are continuing their operational capabilities against terrorism and adoring themselves with the modern strategic gadgets from the available resources.
Jawad Ahmed is an Islamabad based researcher with having interest in Politics, Bilateralism and Strategic Studies. Can be reached at Jawwadahmedikhlaq89@gmail.com
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