Inculcating Tax Culture Through PPP

All efforts to develop tax culture in Pakistan have proved in vain. Only corporate and salaried class is being burdened with increasing taxes. These entities also do not miss any opportunity to exploit loop holes to avoid taxation, reason being their feeling of discrimination. In many developed countries tax rate is very high and yet people pay taxes. Then what is the reason tax culture has not been able to make its place in Pakistan? Unless root cause of any problem is identified it is impossible to treat it. Treating symptoms can only subside the issue temporarily and re-surfaces with increased quantum; this is exactly what has happened in Pakistan. It is essential to identify as to why people of Pakistan are reluctant to pay the tax whereas residents of many parts of developed world are paying taxes willing.

In depth analysis indicates four major factors which develop public opinion with respect to tax culture. Even coverage of law, right implementation and prompt refunds for excess payment; last but not the least fair usage of tax collected.

A cursory look at those countries where people are willing to pay the taxes, it is observed that a sense of security prevails among the tax payers with regards to their future. They know that when they are jobless or living a retired life their paid tax will bear dividends in terms of food, shelter, cloths and health facilities. In countries like Germany and Canada they find their financial status also secured, for some period of time.

It is not very difficult to understand why people in Pakistan are not willing to pay the taxes as revenue collected does not provide them the security, which is their right as per constitution and compulsion on state as per tenets of Islam. Moreover, people feel that tax paid by them is misused for personal benefits of government officials.

Some may argue the concept of horse before cart or cart before horse, thus keeping the issue unresolved. A more viable option is to adopt public private partnership model. Again some corners would consider making a committee to study the option and put up recommendations, so that some extra money is made in the whole game. This whole process would take one complete term of elected government and 180 million people will remain uneducated and unsecured.

Education is the first step towards improvement in economy of any nation. Rightly said by Allama Iqbal.
جس قوم کے بچے نھ ھوںخدار و ھنرمند
اس قوم سے تاریخ کے معمار نھ مانگو
Public – Private Partnership can play a major role in improving education standard of country. It in no way implies permission for private sector to takeover government schools and convert it into a profit making industry. There are approximately 150,000 girls and boys public schools in Pakistan. Government should document their standard education policy, based on equal quality of education for all. There are a number of listed companies in Pakistan and much more private limited companies which are operating profitably. These companies should be invited to take ownership of public sector schools and run it as per government provided guidelines. These corporate should be able to reclaim this amount + 10% from their income tax due. PPP in education can serve as a model for other areas like parks, roads, busstops, etc can be handed over to private sectors for operational management. This will help government to pay back tax payers, control ghost teachers / schools, improve quality of education, uniformity in education standard and save cost on Naukar Shahi by reducing number of bureaucrats looking after administration and management of these schools.