Goodbye transparency!

LAHORE: Those with vested interests are the winners amid the differences developing in the economic team of this government.

The pressure on transparency and equal taxation on all incomes would gradually fade, while the bureaucracy would maintain the status quo of whimsical decision making.

All the good work done by Shabbar Zaidi would go down the drain as he was the lone voice in favour of transparency, documentation and accountability within the bureaucracy as well. More than the smugglers, the patrons who abate smuggling would be pleased.

The under filers of production would take a sigh of relief; and those who were temporarily not resorting to under-invoicing would make a fresh and more enthusiastic start.

It is customary in Pakistan that when the governance and economic plans of any government fail they look for a scapegoat. At the start of the PTI tenure, the blame was put on the bad deeds of past governments.

But almost 18 months later, the people no more believe in this propaganda as the economic situation has deteriorated beyond imagination. This government has always acted impatiently and in the process made changes in bureaucratic transfers and postings with unusual haste.

This created a sense of insecurity among the bureaucrats and they started operating in panic mode taking wrong steps or taking no step at all. The first political victim of this haste was Asad Umar, the blue-eyed friend of Imran Khan who was unceremoniously removed as economy failed to pick up.

The new economic team also failed to kick-start the economy and the main players were Advisor to Prime Minister on Finance Dr Hafeez Shiekh, State Bank of Pakistan Governor Reza Baqir, and Federal Board of Revenue Chairman Shabbar Zaidi.

The FBR chairman was the lone person in this economic team, with experience of the way the businesses and the bureaucrats operate in Pakistan.

He was the top tax consultant before taking over as FBR chairman and knew the weaknesses and strengths of businessmen and bureaucrats. He was in fact the middleman between the two. He had a clear idea as to which bureaucrats were crooks and which businesses have the tendency to conceal taxes through various means.

He was the only one with inside information of both the tax collectors and taxpayers. He was dangerous for both. And he was the target as well.

The bureaucrats can hoodwink both the imported economic planners and continue with their past practice of taking graft from the patrons they have been serving for decades.

Shabbar Zaidi was an intruder in the bureaucratic domain and he was a marked person. Targeting him was easier as well because he had no political support or support in establishment. The other two were being supported by the powers that arrange dollars for the country.

The FBR chairman failed in his documentation drive as the vested interests supporting grey economy were much stronger than his resolve. That failure resulted in under achieving of the revenue target.

The rulers forced him to go lenient on traders and smugglers which deprived the revenue collector to collect proper taxes from them. As far as the revenue collection from the existing tax base is concerned, he performed admirably well.

The FBR increased tax revenue by 17 percent in seven months of this fiscal out of which almost 15 percent was collected from the existing taxpayers and firms, while two percent was contributed by the tax evaders.

The plan in fact was to add 17 percent additional revenue from tax evaders and 16-17 percent from the existing taxpayers.

From the existing taxpayers the collection was enhanced by increasing tax rates. The performance on this count was excellent, because the economic activity was shrinking and one expects lower revenues in a shrinking economy.

The tough part was to collect taxes from tax evaders who are highly influential individuals. They enjoy both political and bureaucratic patronage.

Those who were under-reporting income did steal government revenue but gave the bureaucrats what they wanted. The smugglers and those indulging in under-invoicing were also doing the same.

Holders of grey wealth were also friends with politicians from both sides, and fulfilled their financial needs when needed.

So the operators of black economy were the main source of income for the bureaucrats and acted as patrons for politicians. Thus, they were untouchable and the person who aimed to target them had to go.