Flood Surcharge not a solution, widen tax net: CPDI

No doubt we need huge amounts for humanitarian aid, rehabilitation and reconstruction of flood hit people and structures but we have to take proper steps instead of hasty and semi cooked recipes as we do. No more flood surcharge, but a sustainable resource base is needed by widening tax net.

Centre for Peace and Development Initiatives (CPDI) Saturday expressed concern over the reports that the government was contemplating the imposition of new taxes or a flood surcharge to raise funds for reconstruction of flood affected areas through an ordinance. Successive governments have indulged in highly undemocratic practice of conducting legislative business through ordinances at the expense of collective will of the people. This practice is especially deplorable when elected Parliament is in existence, said CPDI.

If at all there is any justification for a new tax, it should be debated in the Parliament and a proper legislation should be carried out as an Act of Parliament rather than through an Ordinance, said a spokesperson of the Centre.

CPDI believes that the Federal Bureau of Revenue (FBR) needs to make tax collection efforts more efficient and honest so that every single rupee that falls within the taxable income ends up in the national kitty. More importantly, CPDI demands the government to explore options for widening the tax-net.

Existing tax collection arrangements either impose minimal taxes or provide complete exemption to certain sectors, which have great potential to contribute significantly to the national exchequer. In the absence of efficient tax collection system which taxes everyone with taxable income without discrimination, we will continue diverting development funds towards relief and reconstruction in the wake of every natural catastrophe at the expense of educational and healthcare needs of the people.

“Therefore, instead of taking ad-hoc measure of imposing one-off tax and diverting development funds for reconstruction of the damaged infrastructure, the coalition government should initiate process of building consensus on how to bring into tax-net those sectors of the society which have hitherto avoided paying taxes,” said the spokesman.