Every government complains that people avoid paying income taxes; hence, the number of income taxpayers in the country has always remained very small. This year, the government took pride in the fact that the number of taxpayers had increased to 5.9 million, a 17.6 per cent increase. But one-third of the taxpayers filed zero income tax returns. Many taxpayers believed the tax amount was too high because the FBR had reduced taxable income and increased the tax on it. Ultimately, the tax amount collected was much lower than expected.
The economy showed a downward trend due to the government's new tax policy. The taxpayers felt most disenchanted with the system when they were charged withholding tax at 18 per cent. On top of this, the taxpayers had to pay a higher tax rate on the same income. How much a taxpayer will take home is for the government to assess.
The report submitted by the Federal Board of Revenue (FBR) shows that 5.9 million income tax returns were filed in 2024-25, showing a 17.6 per cent increase compared with the previous year. It, however, didn’t matter much as nearly one-third of the reports carried zero tax returns. Many factors plague the economy by acting as parasites. Topping the list is the large bureaucracy, beside many state-owned organisations that regularly quote yearly losses yet remain part of the government inventory. PIA and the Steel Mills lead the state-owned parasitic organisations, not to mention the Rs5.9 trillion losses suffered by the SOEs.
Former president of the Lahore Chamber of Commerce Mian Abuzar Shad recently revealed in a TV interview how so many bureaucrats are bleeding the nation. In his fiery interview, he didn’t leave any stone unturned in criticising the bureaucratic system, holding it responsible for the country's financial mess. One tends to agree with him by observing the high-profile style of the bureaucrats, especially when officials of the rank of assistant commissioners were allowed to travel in 4x4 double-cabin Toyota Hilux Revo vehicles. An assistant commissioner is the lowest gazetted rank in the civil service.
In a recent high-level meeting under the leadership of Prime Minister Shehbaz Sharif, it was decided to ‘stabilise the economy, cut costs, spur growth’. One of the main factors the PM emphasised during the meeting was Research and Skill Development rather than infrastructure-related projects. Now, constructing multi-storey office buildings and secretariats is the favourite pursuit of the government officials. For instance, would research and skill development be more profitable for the bureaucracy, or would constructing palatial multi-storey offices and residential buildings be more profitable? Pity the poor taxpayers who twist backwards to pay their taxes.
Why does the economy of the country, instead of going up, continue to slide downwards? There’s no secret behind it. If the government means business, it must get rid of the loss-making organisations as its first priority. Everyone knows the powerful interests come in the way of privatisation, without which the loss-makers couldn’t survive. Is there any loss-making organisation operating continuously in the private sector?
The mismanagement and corruption by the national bureaucracy, as pointed out in the recent IMF report, are mainly responsible for keeping the economy in disarray. In a detailed report, the IMF has made it mandatory to control the ‘privileged entities’ in the system that interfere in public administration. The multi-layered, bloated organisation known as the national bureaucracy is hugely expensive to maintain. The IMF rightly stresses complete transparency in managing the national affairs of the state. It has gone so far as to make it conditional when sanctioning loans, keeping transparency in mind while managing governance affairs.
The writer is a freelance columnist based in Lahore. He can be reached at: [email protected]
