Budget Dynamics
When all the hyperbole and semantics of stabilization and growth are done, Pakistan’s many problems can be traced back to one basic issue, poor revenue collection. What would happen if all of a sudden Pakistanis decided to pay even 30% of what they are supposed to pay in taxes? To start with there would be no Budget deficit, what to talk about meeting the gap by begging for loans. Then, we would be able to pay back some of the hefty debt (and commensurate interest thereof) we have managed to acquire in a dozen or so “democratic” years, successive Finance Ministers running from pillar to post to acquire even more debt to pay for the servicing alone what to talk of returning the principal amounts due. We would then be able to allocate a substantial sum for upgrading/modernizing the socio-economic infrastructure which is falling apart fairly rapidly. Next, more money would be allocated for development expenditure, giving priority to those areas which are still living in the dark ages even in the new millennium. In a country where the main business of government is business instead of governance and the biggest employer at all levels is government, the increased cash flow into the economy will force-multiply the economic opportunities — that in turn, along with a myriad more pluses, would allow the government to decrease taxes and thus increase the revenue collection. This is the stuff dreams are made of, being an incurable optimist and with a genial nature that does not accept reverse as a permanent feature, Shaukat Aziz, Pakistan’s Finance Minister for the past two budgets, must be dreaming this recurring dream. And what would happen if the revenues doubled to 60%? Fantasy?
