What’s the game, politically speaking?

Note: I completed this article on December 9, 2014, and wrote: "(Government) ought not to be afraid of martial law the prospects of which are zero presently, rather minus." Now merely 9 months later the prospects of martial law have grown formidably positive; so what's the game, politically speaking, let's try to see:

What's the game, politically speaking?

In democracy, only a majority party is allowed to rule, and it may turn out to be a tyranny; no smaller party alone can lay a claim to that privilege. That’s the advantage of democracy one can cite while arguing with its enemies. Pakistan and other countries like it are an exception. In such countries, parties of every size can unleash a rule of tyranny under the banner of populism. Thus all the gatherings and processions of every size which such parties hold are quoted as a referendum against the government. Both Pakistan Tehreek-e-Insaf (PTI) and Pakistan Awami Tehreek (PAT) have been quite vocal in delegitimizing the government after each Jalsaa of theirs; thus PTI’s Faisalabad “lockdown” of December 8 in their wisdom has already unseated the government.

That’s because in countries like Pakistan the states have transformed themselves into Jelly States. Years back, a Swedish economist Gunnar Myrdal (1898-1987) denoted them as Soft States; he meant to say: They have rules and laws and various agencies to implement them but they do not do so, and that makes them Soft. He termed them as ridden ‘by deficiencies in legislation and, in particular, law observance and enforcement, a widespread disobedience by public officials and, often, their collusion with powerful persons and groups ... whose conduct they should regulate.’ Since then that quality of Softness of states has further deteriorated; it appears that quality has now acquired the characteristics of Jelly, a shapeless thing which fits in with any shape under any type of pressure. That’s how Pakistani state looks like now!

On the one hand a group of just a few hundred or thousand men armed with sticks can paralyze the Pakistani state; that has already happened this August in Islamabad; that happened in Faisalabad too, and is destined to happen in other cities; and on the other hand, though the present government is all determined to try a military general for allegedly committing High Treason but is facing formidable hurdles at every step; all that testifies that the Pakistani state is but helpless in establishing its writ in every domain. Here it doesn’t matter whether it has got the will to establish its writ or not, because there is no way to know but through its own efforts which it may put in establishing its writ and with the help of which it may be ascertained that it is intent upon establishing its writ.

Let’s pick out three areas to see are there any efforts being made on the part of the state to establish its writ. First is Taliban, who openly challenge the state and want to capture it through an armed struggle. The state completely failed on this count; for many years it let thousands of innocent citizens to be killed by these fanatic warriors and remained mired in its own policy of appeasing them and their supporter groups and parties. Now there is an operation going on, whose range and scope is still not clear. The second area relates to politics. A number of religious and political groups and parties openly challenge the state just like Taliban; they rather blatantly indulge in unlawful rhetoric and behavior so often that makes one wonders are they above the law of the land. Not only are parties like PAT and PTI part of this club of privileged politicians, there are a number of groups and parties which use religion to further their political aims and objectives and though their social base may not be more than a few thousand supporters but they and their leaders work like mafias using arms and fascistic ploys and whenever they want they paralyze the whole cities, and the state seems totally helpless!

As has already been mentioned the third area is where the present government, which is at the moment in command of the state of Pakistan, is trying its hardest to bring a usurper general to book; that the Pakistan Muslim League (N)’s government is doing that in the face of fatal odds is no secret now. And the do-and-die and destabilizing politics of PTI needs to be explained in that context also.

In view of the above, one lesson, which every political analyst and politician be he in the government or outside of it needs to learn, is that political actions are not judged by the intentions of their actors, i.e. political parties and leaders, but by their impact and consequences. That’s the first and in a sense last tool of any political analysis; because in its absence no political action may be understood in terms of its impact. As for the intentions of anybody, one can never be sure of; and of course, when a murder occurs, it’s a murder only, though the circumstances are taken into account which prompted that murder; however, the fact of that murder is never disputed, which is a consequence of the circumstances. For instance there may develop a consensus what impact the PAT and PTI politics during this August-October and PTI’s present politics is having on various things including the state and its writ, but never on their intentions.

Unfortunately, from those who are at the helm of affairs of the state and the politicians to those who form the circles of opinion and political following no one is serious in taking into consideration how the present politics of PTI is weakening not only the writ of the state but state itself. Hence, it is this third area of politics where the present government which manifests the state of Pakistan at the moment must establish its writ. It ought not to be afraid of martial law the prospects of which are zero presently, rather minus. It ought to bring the state of Pakistan into the shape which the provisions of its constitution endow it with. It ought not to allow the society of Pakistan slide into a chaos which may result in a civil war. It’s time the state of Pakistan must act to establish its writ in the political domain where it is required to be established first!

PML-N’s Bhatta or withholding tax

It seems the present dispensation of PML-N believes in no principles of taxation. It’s just there to extort whatever amount of taxes the Federal Board of Revenue may extort from the citizens in the form of bribes and in the name of taxes: of course, for itself as well as for the government.

However, the principles of taxation, the PML-N may be supposed to believe in, manifest themselves in the measures it announces in the budget and then obtains their approval from the parliament. That much is least controversial; what is controversial is the way the new taxes are conceived and implemented. As a rule, it’s the income or the consumption which is universally taxed. Also, the just taxation is not spending-driven, which certainly is the case as far as the PML-N government’s economic policies are concerned.

No doubt, there are countless examples available wherein arbitrary taxation was made recourse to; such as the medieval hearth tax, sort of a property tax. But, in the past they were no representative governments; that’s why they could afford arbitrary taxation policies. The question is whether PML-N, a democratically elected government, can afford such arbitrary taxation like the present withholding tax of 0.3 % on all the banking instruments, which will automatically increase to 0.6 % after September 30! Or it’s making a farce of the principle of “No taxation without the representation!”

It needs to be noted here that how come that only the traders have the courage  to espouse the cause of protesting against this arbitrary tax; doesn’t this withholding tax affect other low- and middle-income strata of society! For instance, the salaried persons, or pensioners, widowers, ordinary savers, whose earnings do not make a taxable income. All such citizens are being victimized only because on any day when they deposit or withdraw or transfer an amount of more than Rs.50, 000, they lose 0.3 % of their precious money! These citizens are not part of the protests against this Bhatta tax. They must be! Also, according to various reports the imposition of withholding tax has caused a massive reduction in the bank-deposits.

How blindly the banks operate in Pakistan the Finance Minister, Ishaque Dar has already admitted; he told that banks illegally and unjustly deducted the 0.3 % tax on all the banking instruments regardless of the fact that which ones belonged to the Filers and which to the Non-Filers. Apart from this mismanagement, the 0.3 % withholding tax is arbitrary, unjustified and has no grounds in the principles of taxation. It’s a Bhatta, at best; like the earlier one on the cash withdrawals.

Instead of putting the burden of failure on the shoulders of the FBR which according to a report of the Tax Reforms Commission is collecting only 5 % of the total income tax, the 95 % coming through withholding agents or voluntary payments. Thus the government has actually penalized those who use the banking channels.

Let any tax-expert tell what the nature of this withholding tax is! Is it on income, or is it on consumption? Or the PML-N has found another unique source of easy tax-collection, i.e. bank transactions? Better the PML-N government withdraws this Bhatta and focuses its energies on reforming the administration of tax-collection in the FBR. It is in the long-term interest of the state of Pakistan also.

It’s for the FBR to collect taxes including other taxes from the citizens who earn a taxable income. It’s not through the banks that a government collects such taxes which it fails in collecting via its tax-collector, i.e. FBR. PML-N, do not fail your government! Collect the taxes legally and principally!

Note: An edited version of this article was published in Dawn of August 10, 2015.
Here is the link: http://www.dawn.com/news/1199497/deviation-from-tax-principles