Expanding the net
ITH the budget looming, the new government has reached a fork in the road. One choice is massive restructuring and reformation of the economy — a multi-year project that will require endless hard work. The fruits of the effort may be enjoyed only by future governments. However, the political costs will be immediate and immense, which the ruling parties will bear alone. The other choice — the easy path — will circle back to this same junction in five, 10 or 15 years, but will allow those making decisions today to enjoy the short-term benefits of power. Given what has been sacrificed to install the government in Islamabad, one would assume it has by now chosen the path it needs to take forward. The first test of its resolve begins this week. A drive to get the largely undocumented trade sector registered in the taxation system kicked off on Monday under the Tajir Dost Scheme banner. Armed with incentives and penalties, the FBR is undertaking the campaign to add Rs400-500bn to annual revenues. Although the trader class has long been a solid constituency for the PML-N, it appears that it, too, realises the necessity of expanding the tax base. Defence Minister Khawaja Asif on Sunday has blamed tax evasion by “big fish” as the reason the country was near bankruptcy. The minister specifically pointed to “retailers and wholesalers” as he criticised them for their reluctance to fulfil their tax duties.
Though the finance ministry has so far not spoken publicly on the registration drive, the government seems keen to widen the tax net. From traders to professionals to larger industries, the government looks like it is finally going after undertaxed segments. However, because these efforts seem to be borne more out of compulsion — to win the IMF’s favour — than a desire to make the taxation system more equitable, doubts linger regarding how far the government actually wants to go. With fuel, electricity, and gas prices continuously rising, the salaried class is already under immense stress. It cannot be further burdened. Therefore, Prime Minister Shehbaz Sharif would be well-advised to keep his tax net expansion drive on track. During his last tenure, one finance minister’s efforts to start course correction were hijacked and derailed by another, who had strange ideas on economic management. Mr Sharif should ensure that this does not recur.
Published in Dawn, April 2nd, 2024
Letter inquiry
THERE has been a twist in the tale. After the Supreme Court last week deferred to the federal cabinet, asking it to deal with a disturbing letter six Islamabad High Court justices had addressed to the chief justice, observers had worried that a government-sponsored inquiry into intelligence operatives’ alleged interference in judicial affairs would prove to be a non-starter.
Even as voices from within the legal community were still criticising the Supreme Court for neglecting its responsibility and ceding full control over the inquiry to the government, a respected former judge, retired chief justice Tassaduq Hussain Jillani, was duly appointed to head the inquiry commission tasked with looking into the judges’ letter.
By Monday, however — following an open statement from more than 300 lawyers, amidst whispers that the six IHC justices may be considering directly petitioning the Supreme Court, and a polite ‘no, thank you’ from Mr Jillani — the scheme seemed to have fallen apart.
Accepting demands that the letter be taken up by the Supreme Court under its jurisdiction defined in Article 184(3), Chief Justice Qazi Faez Isa announced on Monday that his court had taken suo motu notice of the matter. A seven-member bench will take the case up for hearing tomorrow. Although some concerns regarding the size and composition of the bench have been raised by certain quarters, the development is a breakthrough for the legal community and is being seen as a positive step.
It is hoped that the court will now arrange for the proceedings to be broadcast live, as in past important cases. The issues raised by the six justices of the Islamabad High Court have caused quite a sensation, and it would, therefore, be in the public interest if they are also addressed transparently.
The legal community deserves much credit for refusing to accept a compromise in the form of an inquiry commission and pushing for the letter to be taken up by the Supreme Court.
Mr Jillani’s well-reasoned refusal to sit in inquiry over six serving justices also deserves commendation. The former chief justice of Pakistan, while thanking the government for its consideration, courteously pointed out that since the letter had been addressed to the Supreme Judicial Council and its chairman, it would be improper of him to interfere in an institutional matter. He also objected to the inquiry’s terms of reference, as set by the government, noting that they did not seem relevant to the issue raised in the judges’ letter, namely, a consultation on what judges must do when they are placed under duress.
In doing so, Mr Jillani greatly strengthened the argument that others had been making: the judiciary must address this issue internally. One now hopes it will do so enthusiastically.
Published in Dawn, April 2nd, 2024