WOULD TAX BE BENEFICIAL…….??


The argument for taxation is clear-cut, if the government is on balance i.e. when the government income equates its expenditures, if the ratio of development expenditure (e.g. education, health, infrastructure, employment generation, agriculture of industries etc) is far more than non development expenditure then taxation is beneficial for the common people. Taxes are the lifeblood of any government; since it is the income of the government and if the government allocates its income in best efficient way, it results in development of any state. Taxation will result in increasing income level of the people of the area and it would increase the employment opportunities if it invests larger part ion development sector. On contrary if the government is corrupt then there would be no investment in health sector, education sector, industry, agriculture and infrastructure which results in on lack of employment, decrease in income level, however that amount of money from taxes will be in hand of ruling class. The states where the tax system is not efficient it would result in the unequal distribution of wealth and it would result in the class distribution in the social setup. The youth will be frustrated due to lack of employment opportunities which leads them to social evils such as street crimes etc.

When we look at the history of Gilgit-Baltistan, the local people fought against Dogra Army and finally they got independence on 1st November, 1947 and then they showed their faith to Pakistan. From the very beginning Government of Pakistan ignored them and didn’t give the citizenship rights to them. The reason behind this was whenever UN will make a referendum in Kashmir, Pakistan will include G-B in that referendum to make majority of votes for Pakistan. Although Kashmir issue is not resolved the G-B people will suffer despite the fact that they got their independence. So in a true sense from the very beginning they were self relient.  In 1970’s era government had strong ties with china, to connect with this emerging power both the governments built the world’s ninth wonder Karakorum Highway. In 1960,s NGOs were working there and it had changed the living standard of the people by providing education and health facilities and later employment opportunities. As compared to NGO and private sector the Government has been lesser development projects, so the ratio in inputs for local development is little.

Government of Pakistan had given the so called status of province to Gilgit-Baltistan in 2008; there is not a single medical or engineering college in the purported province. Comparing with FATA, which is not paying tax still they have representation in the National Assembly as well as Senate. However the courteous government has planned to implement tax in area, from first of November, which is Independence Day of the beloved land Gilgit-Baltistan. The government of Pakistan has shown its cowardice to give the area position of the province; there is no representation in senate or in the national assembly, so on which are basis, on which it is implementing tax???

Due to its geographical importance Gilgit-Baltistan signifies as the head of Pakistan, G-B connects Pakistan with its foremost ally China; most of the trade between these two allies is through KKH and recently they upgrade it by their mutual agreement. It is heart of the Central Asia, and it is also very significant for West to check on China, India and Russia, so keeping in view all the above aspects, and the abundance of the unexplored resources in the area if government wants to make the local government self-sufficient it should improve the infrastructure of the area, there should be investment, so that hidden treasure could be explored. In addition to that government should attract investors, along with it the government can also improve tourism because the area is blessed with the natural beauty, so that there would be income generation, which will result in improvement of the standard of life of people. In addition to that the government should complete the Basha Dam project as soon as possible so that energy constraints could be fulfilled as soon as possible and the private investors could invest in the region.

Let’s have a look at the budget of fiscal year 2012-2013, and its allocation in different sectors including both development and non development sector. Total budget for the fiscal year 2012-2013 has been estimated up to PKR 19.39 billion as against PKR 15 billion last year, and the sector wise allocation is as under:

Starting with the power sector, for which the government has allocated as high as 32.2% of the total budget, which was meant to launched 25 new projects in order to generate 14 megawatt power. Few of the running projects this year includes, new projects include Naltar sixteen megawatt and fourteen megawatt hydro power projects, Shargthang Skardu and projects in Chilas and Ghizer district. These projects will be completed under public sector development programme. Another development projects includes, during September prime minister has launched a project to renew 17 km KKH which was submerge by Attabad Lake, it would cost 282 million USD, which will be completed in a year.  Prime minister announced two billion rupees announced as a grant for Gilgit-Baltistan during his visit in September for socio-economic development but notification has been issued yet. 3 new projects have been launched with the help of United Nations to save forest and wild life, an amount of 48.5 million rupees have been allocated for this project.

Many of the people have misperception that the natives do not pay any tax, but we do pay tax on each and every commodity of the daily use; and the fact is that the ratio of indirect taxes is far higher than the direct taxes in overall income. On the issue of the imposition of direct tax both the Gilgit-Baltistan assembly and the Gilgit-Baltistan council has raised a united voice and criticized Federal Government of Pakistan, because up till now it was thought that the said council was the ultimate body for the decision of the matters province, but now the federal government had put aside the local government in such critical decision.

Many of the officials suggest that this is the success of the present government that that budget has been increased to PKR 19.39 billion against PKR 15 billion which was last year, for non economists it would be a great sign, on the other hand when we compare it with the growth rate of inflation for the year it has no outstanding impact since the inflation rate has been rose to 11.9%, but as far as my view is concern success of those in power and the efficiency of corruption is neither success of the economy nor the welfare of the society in any case, if you do not see any improvement in the social setup which could increase the welfare of the people, how would you call it success. Here is when the issue of the accountability and the good governance rises.

It has been announced in July this year, in the budget that the higher educational expenses will be borne by the government, it has been a period of four months since this announcement was made but there has not been any notification issue to the institutions where the students of Gilgit-Baltistan are enrolled in their studies, many of the student are still waiting for the good news with the hope government will fulfill the promised it made.

Many of the people emphasize on the normative aspects of the taxation but those are obvious but on the basis of past experience can anyone guarantee the positive aspects of the taxation? since the individual always adopt rational expectation, therefore most of the people obviously would not obviously favor taxation. But this thing can be overcome if the taxation in the Gilgit-Baltistan works through proper constitution, on the other hand it needs new minds and new economists to run the system properly which would make the taxation system more efficient. This would work if and only if accountability issues are resolved and we need built a fair taxation system in order to have socio-economic development of our home land.

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