THE fact that desperation born of extreme poverty can drive parents to murder their own children should shake the authorities out of their stupor to face a shocking reality. Last week, Multan police took into their custody a mother whose children died after consuming a toxic substance. The mother later confessed that she and her husband, who later took his own life, had poisoned their three children because of the family’s poverty. There have been other, similar cases where penury has claimed its victims in violent ways. Last year in January, a father of four in Karachi set himself ablaze because he was out of a job. A month later, another man in the city, unable to pay his debts or his rent, took his own life. It is a matter of utter shame that there should be few forums to turn to for help in a country where such wretchedness and despair exist.
Several economic analyses, including by international bodies such as the IMF, have predicted that poverty in the country will grow. According to one calculation, we may soon see up to 85m people below the national poverty line. Food prices in the last two years alone have increased by more than a third while the Covid-19-induced slump in the job market has forced thousands of families in the country to go hungry. The prices of almost all edible staples — wheat, flour, sugar, pulses, oil and fruit — have been on the increase, with the government, despite all its talk of aiming to be a welfare state, not being able to do much. There is a need for greater introspection, and the state must ask itself why, despite all its efforts to introduce poverty-reduction initiatives, it has not been able to help those in dire need. The irony is that Pakistan is recognised as one of the most philanthropic countries in the world. The government needs to focus on holistic multidimensional programmes that address socioeconomic vulnerabilities rather than tackle poverty as a one-dimensional issue.
Tax revenues
LAST week, the FBR crossed what Prime Minister Imran Khan called a historic milestone by collecting more than Rs4tr in taxes (in the 11-month period from July to May) for the first time in a given fiscal year. The reported figure is around 18pc more than last year’s Rs3.54tr. The increased tax collection is being showcased by the government as evidence of a recovering economy, which continues to feel the effects of the ongoing pandemic. Notwithstanding the improvement in tax collection, which was stuck at around Rs3.8tr for the last three years, we still lag behind the revised tax target of about Rs4.7tr. That should be a cause of concern for the government since the National Accounts Committee now estimates the economy to expand by 3.94pc during this fiscal year against the original projection of 2.1pc. Though officials insist that the (revised) tax target will be achieved, their claim does not appear very plausible.
A break-up of the taxes collected by the FBR shows that sales tax grew by a hefty 28.3pc in the first 11 months of the ongoing fiscal because of the rise in fuel prices, increase in imports, and better economic conditions. Collection of duties by Customs posted an increase of 18.6pc while the federal excise duty was up by 11.55pc. However, income tax revenues have grown by just over 10pc in spite of a significantly large number of presumptive and withholding taxes. For next year, the IMF wants tax revenues to be closer to Rs6tr. With the economy projected to increase by 4.8pc, the collection of additional tax revenue will be difficult without imposing new taxes and cancelling several exemptions. This is why Finance Minister Shaukat Tarin, is trying to convince the IMF to lower its suggested target to nearly Rs5.5tr to make it realistic and achievable.
The new finance minister has time and again underscored the need for boosting tax revenues, saying if Pakistan were to sustainably grow at 7pc to create jobs and alleviate poverty it would have to drastically raise its tax-to-GDP ratio. Indeed, the current ratio of around 10pc, one of the lowest in the region and in the world, is at the heart of the nation’s economic and financial woes. Without raising the tax ratio to a decent 15pc in the next few years, it would not be possible to bridge the fiscal deficit, offload debt or employ fiscal policy tools to push economic growth. Any serious effort to raise taxes anticipates wide-ranging reforms, especially improvements in the direct tax regime for making it robust and people-friendly, to broaden the tax net as well as create close linkages between the nation’s tax policy and growth objectives. Ever since he was given the job, Mr Tarin has been pledging to move in this direction in the next budget. Will he succeed in delivering on his promises? Only time will tell.
Census controversy
WHILE the Council of Common Interests may have approved the controversial 2017 census in April of this year, Sindh continues to have major reservations about the exercise. This is reflected by the fact that the Sindh government has written to the Senate chairman and the National Assembly speaker calling for a joint session of parliament to discuss the issue. According to the Sindh chief minister, the populations of Sindh and Balochistan have been undercounted. To back this claim, he has cited a Unicef survey which lists average members of a household at 7.2 for Sindh, while the census results put the number of the average household at 5.64. If these numbers are considered, based on the Unicef survey Sindh’s population should be over 61m, while the official headcount says the province is home to just under 48m people. This is no small difference and will have a major impact on the division of resources. The MQM has also raised questions about the authenticity of the census.
While the CCI has decided to conduct a fresh headcount by the end of this year, the controversy that has persisted after the 2017 exercise needs to be addressed. If Sindh has such strong reservations over the exercise, then perhaps a joint session of parliament would be the best way to arrive at a judicious solution acceptable to all. Therefore, such a session should be convened without delay so that the issue is settled. Moreover, looking ahead, a more scientific and transparent method to conduct the census needs to be introduced so that controversies do not arise in the future. For this, technology can be utilised, while best practices of developed states where headcounts are largely straightforward exercises should be studied. What is more, the constitutionally mandated period of holding a census every 10 years needs to be respected. Unnecessary delays caused by political expediency create gaps in data which affect planning on a national level. The census is a huge exercise costing billions of taxpayers’ rupees and hundreds of man-hours. The results of the exercise affect how resources are divided across the federation and how to plan for the future. Therefore, the process needs to be kept free of politics and controversy, while conducting the headcount before time is also a waste of resources. It is hoped that a positive consensus emerges from a joint session of parliament that can lead to an accurate headcount.
