Tidal Wave 2002
A few days before Referendum 2002 a crude poll conducted by Research & Collection Services revealed that, viz (1) the turnout would be less than 30% and (2) 65% of those responding to the queries would support the President. This poll was conducted over 93 cities/towns and adjacent rural constituencies, there was plus/minus 5% margin for error in this poll. By 12:30 pm on Referendum Day the feedback from the staff in the field concluded that the poll was spectacularly wrong on both counts. Except for Quetta, some parts of interior Sindh and a few places in Karachi, the polling throughout the country was brisk, the turnout already crossing the 30% mark. In exit polls, slightly more than 90% were openly favouring the President, only 2-3% demurred. Between 2 pm and 4 pm voting slowed considerably because of the intense mid-afternoon heat, by 5 pm there was a rush to meet the 7 pm deadline. The 60% plus turnout claimed by the government is therefore credible.
Where and why did the pre-Referendum forecast go wrong? First and foremost the voters were well motivated towards the President. Even while complaining that the present governance was far from satisfactory, many did not want Ms Bhutto or Mian Nawaz Sharif misgoverning them again. Third, almost 15 million voters are under the age of 21, voting age being reduced to 18. Owing no allegiance to any political party and brought up on political horror stories, they cast their vote en bloc for the President. His hard stance towards the militancy of the religious parties was another factor. Lastly the increased number of polling stations, 164000 in all, almost 6 times the normal electoral day average, increased the voter turnout manifold as it allowed easy voting throughout the day. As someone remarked, everyone and his mother-in-law went out to vote, many had never voted before. The same refrain remained throughout the country. There were certainly voter irregularities, mainly, viz (1) voters not having their identities properly checked (2) the indelible ink coming off and (3) repeated voting. These did not have official sanction much and were not in such large numbers as to affect the voting turnout, which hovered around 60%. Of the 40% who stayed away, at least half were hard-core supporters of the opposition political parties.
Black Holes in Revenue Gathering
A recent survey conducted by a research company assisting in the TV Licence Fee Campaign 1998-99 PROJECT VIEWFINDER is very revealing. In the first two months of the campaign, 27% of the people belonging to low-income group area had purchased TV licences whereas 14% of those classified as middle income group and less than 6% of the affluent group had done so. In areas like Defence Housing Authority Karachi, out of 50 houses on one street, nearly every house having a Dish Antenna, only 2 had obtained TV licences and even they had not paid for the Dish Antenna. Amazing as it may seem but those who can afford to spend Rs 250 for a single sandwich at one of the mushrooming fast food outlets are averse to paying Rs.250 as annual fees for a TV licence. On the other hand, at the other extreme the poverty stricken, and this includes the rest of the middle class in the present economic environment, are far more responsible with respect to their public obligations. If you study the proportionate value of the licence fee to the annual earnings of the low-income group and compare it with that of the affluent, the factor of greed and indifference to civic responsibilities among the well-to-do is unimaginable. Analysing the wide discrepancy the company concerned came up with some startling findings, among them viz, (1) those on the poverty line are very concerned about socio-economic facilities, as such they tend to fulfil their obligations far more than the higher income group who take it as a God-given right, their conscience feeling no responsibility towards paying their dues to the State and its agencies (2) the poor income group fear the threat of court summons and police involvement whereas the affluent have no fear of either (3) for the poor the TV licences is another piece of documentation as proof of ownership and occupation of their house while the rich want to avoid such documentation and (4) the prize draw scheme attracts the poor but causes little or no excitement for the affluent who already possess whatever is on offer. These observations are a shameful reminder of the sad lack of social conscience among the affluent. As the last day before penalties and surcharges are applicable approaches, the announcements on TV and print media, encouraging TV set holders to purchase licence, have become slightly tougher in tone. One of the solutions proposed by the collection agencies is also revealing, lists of defaulters are being prepared which are intended to be published in local newspapers. Court summons are also being readied to be sent in an inverse ratio to purchases, affluent income group 10, middle income group 3 and 1 for low income group. Most of those who default, particularly in the affluent group, will probably end up paying even 10-15 times more than the original sum other than the embarrassment and the unnecessary time consumed between court, bailiffs, police station and bank. That experience should be a powerful enough incentive to dissuade them from avoiding taxes and duties in the future, at least the dues against utilities.
Most of this country’s problems stem from the fact that those who have gained most from the largesse of the State do not want to pay taxes but evade them by relying on “bribes and connections” to escape the clutches of the law. The fact that only 1 million or so souls are registered as taxpayers, mostly the salaried class, is a disgrace. At least 3-4 million more taxpayers are evading registration, every one million taxpayer means Rs 100 billion approximately to the exchequer. This is a staggering Rs 300-400 billion direct loss to the public exchequer, more than the debt repayments, defence expenditure and cost of running government all put together. Similarly as regards Sales Tax registration and Central Excise Duty, the evasion is staggering. In Rawalpindi Sales Tax Region alone, over 9,000 units of coal mines, stone crushers and brick manufacturers are not registered, each capable of paying Rs 100,000 annually at the very minimum. This amounts to an evasion of Rs 9 billion. However with the active connivance of tax enforcers, Rs.7,000 per month per unit for NOT registering (a cool approximate Rs.60 million a month or Rs.72 crores per year), very few of the units, if any, are registered and those that are, hardly pay 5% of what they should. The present GST issue is an outrage perpetrated by the PM’s favourite constituency, the retailer business community. Retail shops in all the markets are stocked full of goods, to survive the smallest shop must sell not less than Rs 1,000 per day, in Liberty Market Lahore sales are nearly Rs 3-4 million a day. Similarly jewellery shops sell as much as Rs 5-6 million a day, if not many multiple amounts more. Yet these traders refuse blatantly, not only to pay a fraction of what is actually leviable but refuse to get registered at all. Brazen-faced about their defiance, they are holding the PM and the country to ransom by holding strikes regularly, denying consumers access to necessary consumer items. Rather than succumbing to threats and blackmail, the government should withdraw “law and order” cover from those who do not get registered as well as banning issuance of arms licences to them. If their shops and houses are looted or vandalised, their FIR should not be registered at any Police Station if they are not registered as GST payers. Furthermore one can only assess the amount looted if the GST declaration gives an approximate value. In the same manner what is the proof you own a TV set or VCR unless you have a valid licence? Without the requisite licences they cannot be included in the list of stolen items. This may seem an invitation to loot, anyone who does not subscribe financially to the public exchequer towards maintaining of police cover does not deserve to be secured or protected by the State and that also at the expense of others who pay their dues. The State may well look after them as private citizens but as professionals and their place of work thereof can only fall under the ambit of the State when they start paying their taxes. Moreover the citizenry should be encouraged not to purchase any item from them unless they are registered —and paying GST.
Federal Budget circa 1990 – III
The coming Federal Budget exposed Pakistan and the Federal Government to the financial ills inherited from the past, not the least of them being a foreign debt burden of US$ 19 billion with almost US$ 6 billion lying unutilized due to inefficient bureaucratic practices. Already plans for a LONG MARCH on Islamabad post-budget are afoot, it being taken for granted that there will be reason enough to make an attempt to bring the streets into the front-line of the Dump-Benazir campaign (or as it is probably known, Anybody But Benazir (ABB). One does not have to be a soothsayer to predict tragic consequences for the country, encouraging the neutrals, or the Great Silent Majority if you please, to take a “plague on both your houses” attitude. The Federal Government needs to elicit support from all sections of the people to find answers to the problems troubling the economy. It behoves the opposition to respond in kind for the sake of the nation. Let’s not play games with economy, in the end the masses that have voted the governments into power need the elected to tend to the more serious matter of ameliorating their atrocious living standards.