THE rich or the very rich in the country -- and their number has swelled since the time of independence -- who pay income taxes are, in many cases, paying far below what they ought to pay; they never declare their true incomes, There are also many who should be eligible to pay income tax but evade paying any such tax whatsoever. No wonder that the government has been scrounging for resources to meet its ends and properly maintain essential services or to undertake developmental activities.
Real laudable success of the National Board of Revenue (NBR) will come when it can demonstrate that it has made fully operational its cell that was set up exclusively to pursue the truly big tax evaders and to identify and net the potential ones. Greater activism against this category of people can lead to a very substantial increase in collected taxes in a short period of time. The outcome of fully activating the large taxpayers unit in the NBR -- even against a handful of tax dodgers -- can be a far happier one in terms of revenue collection than going after many thousands of lesser people or institutions found to be evading taxes.
There are principles in taxation that must not be lost sight of by taxmen. One main principle is that the burden of taxation must be borne greater by the ones who have the capacity to pay most taxes. This is also basic social and economic justice. Then, there are other principles such as not taxing to the point of cruelty so that ordinary taxpayers do not fell harassed, persecuted or demotivated. Thus, the NBR will need to be careful as it goes about its tasks to raise tax collection. It needs to apply its pincers very correctly by going more after the nabobs among the tax evaders while prudently avoiding a feeling among common taxpayers that the NBR is turning oppressive in its tax-hunting operations.
A F M Fakhruddin