ASIA/PAKISTAN - Civil society says rich should pay higher taxes to help flood victims

Islamabad (Agenzia Fides) – Pakistan should radically reform its tax system, increasing taxes on the richest members of society, so as to send more aid to the flood emergency. This is what the civil society of Pakistan, the Church, and international organizations are all saying, as the country faces the largest humanitarian emergency in its history.
"A great effort of national solidarity is needed. If the state would encourage the wealthy to give up part of their wealth to the benefit of society, today, in particular, for the flood victims, this would certainly be a step forward in the right direction for the entire nation,” Fides was told by Peter Jacob, Executive Secretary of the Commission for Justice and Peace within the Bishops' Conference.
Observers say Pakistan has a system of taxation that is among the lightest in the world, representing approximately 9% of the economic value. According to Akbar Zaidi, an economist who recently published a report on Pakistan's tax system for the international study center Carnegie Endowment for International Peace, a major problem is that "many citizens avoid paying taxes altogether. Less than 2% of the 175 million people pay a tax on their income, the report notes. And a productive sector such as agriculture - one of the main sectors of the economy in the country in the hands of large landowner families - is totally exempt from taxation.
“The time has come for the small rich elite of the country, which includes the army, landowners, and the urban middle classes, to put in part of their wealth towards the welfare of the entire population," a forum for civil society organizations in Pakistan told Fides.
According to the organizations, a change in the system bringing the level of taxation to around 15%, would allow the state to generate 10 billion dollars, which could be immediately allocated to meet the needs of the emergency that affected 20 million people and destroyed more than 1.8 million homes. That money, he says, could be used to rebuild infrastructures such as bridges, roads, and schools - all priority needs for the economic and social rehabilitation of the nation.
Upon pressuring from the International Monetary Fund, the Pakistani government had promised that it would introduce a tax reform in July of last year, but it was precisely the arrival of the floods that caused a delay in the project. Today, debate is underway regarding a possible “one-time tax” on urban and agricultural properties to be paid by citizens not affected by the floods, however it is unclear if this proposal will be passed and if so, how much money it would generate for state coffers. (PA) (Agenzia Fides 24/09/2010)