"Taxation is a most flexible and effective but also a dangerous instrument of social reform. One has to know precisely what one is doing lest the results diverge greatly from one's intentions" - Gunnar Myrdal, The Political Element in the Development of Economic Theory, 1953, pg. 188.
Our law-makers (sic) have always shown apathy towards equitable taxes, progressive concepts of tax philosophy, especially their redistribute nature, social mobility and societal concerns on the grounds that these notions are merely theoretical and need to be ignored for "better" collection results.
For wizards sitting in the Central Board of Revenue (CBR) these vital issues have no practical significance as achievement of revenue targets is more important for them. Unfortunately, the people sitting in the Parliament are proving to be rubber stamp and every year they blindly endorse erratic and regressive taxation measures by tax bureaucrats.
The sole object of the State, thus remains squeezing out from its citizens as much as possible, irrespective of the harshness and regression that is the direct result of their extortion.
Individual achievements take priority over the consequences of taxation policies and short-term accolade is perhaps more precious than a prosperous future for the nation. It is indeed remarkable how we have blinded ourselves to the inevitable consequences of economic imprudence to which we shall be subjecting our next generation.
Whether we are taxpayers or tax collectors, we all belong to this country, we all owe something to it and we all need to realise our responsibilities. But what is happening? One is causing dents in the economy by massive evasion and the other has become an extortionist. Both are poised against one another with utter disregard to the malaise of the common man whose chief concern is making ends meet in the face of rising prices and inflation.
Let us all take a minute to think (forgetting who we are) whether our scope of action is limited to ourselves, our time, our children or to others, the future and other people's children?
We are not islands in ourselves that we can enjoy an unconnected existence. We are deeply entrenched in the fabric of our society and cannot afford to survive without each other's support. There are many objectives of taxation but for the time being only three merit consideration being of prime importance.
Rather, we are forcing mass rural to urban immigration choking the cities with slum dwellers and disproportionate pressure on their limited resources. Instead of focusing on developmental growth we are taking pride in pushing the entire nation towards aimless consumerism forcing them to pay through their noses for such trivial objects as mobile phones and unlimited shopping on credit cards, making it all a matter of false prestige and status.
What steps have been taken to support the dwindling agriculture and agro-based industries? As we approach almost 70 years of independent existence we are yet without any concrete blueprint to make agriculture and agro-based industry our stronghold in the world market.
On the contrary we have to rely on heavy imports to feed our people. Other industries that were flourishing until recently are on the verge of collapse but nothing concrete is being done to stabilise them, rather, the remaining few government-owned corporations/industries are being subjected to privatisation.
The unjustified increase in emoluments of members of the assemblies in the current budget shows nothing but apathy on the part of the government by greedily filling their purses with hefty chunks of the taxpayers' money instead of displaying austerity.
At this juncture, one is reminded of a past incident that should be an eye-opener for our leaders. On being asked why he preferred barley bread over more exotic cereals, Caliph Hazrat Ali replied that it was the staple food of the poorest of the poor of his caliphate and when that poor is able to afford better food, he too would switch to it.
The amount of money spent on our white elephants is enough to run many good and much needed schools and hospitals but let the cities bear the brunt of rural influx for education and health while the smaller towns remain neglected.
Our spendthrift rulers cannot be bothered to lower their standard of living, come what may. After all, somebody had to inherit the gora legacy and who can be more worthy than their loyal gumashtas!
A highly indebted country which continues to borrow for making up deficits cannot afford their rulers to indulge in luxury envied by leaders of highly developed countries.
The amount of money (again, coming from extortionate taxes) spent on their ostentatious living at home and on their foreign trips is shamefully horrendous. Its remarkable how callously our 'saviors' plunder revenue obtained from the sweat of our hard-working people!
A historical flash-back will remind us why the presumptive tax regime (PTR) was first introduced in income tax law. When some people started exploiting the law to the extent of massive tax evasion resulting in depleting the exchequer of millions of rupees in the form of refunds and through evasion, a bureaucrat's brainwave led to the implementation of this scheme.
In other words, to a great extent, we, as taxpayers are responsible for PTR. The success and convenience of this scheme encouraged tax collectors to extend it to other sectors and PTR started spreading its deadly tentacles in all major areas of income generation.
Gradually, the very people for whom this scheme was made began learning tricks of the trade by building in the amount of tax to be deducted as full and final in their quotes and hence passing on their burden of tax to the person paying for their services or goods taking on the guise of indirect taxation.
When the Income Tax Ordinance 2001 was introduced, there was great enthusiasm in the governmental quarters about gradually reducing the quantum of presumptive tax regime and chapter XII was specifically titled "Transitional advance tax provisions".
There were sighs of relief that the noble aim of returning income to its appropriate form of pre 1991 position will be achieved and this masked blotch of indirect taxation from the Ordinance will be erased forever. Alas! This happiness was short-lived. Since 2004, there has been an avalanche of provisions relating to PTR.
To name a few introduced through Finance Act 2004:

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§ S. 113A            Tax on income of certain persons
§ S. 113B          Tax on income of certain retailers
§ S. 156A                          Petroleum products
§ S. 233A       Collection of tax by a stock exchange
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Perhaps the Finance Act 2006 tops the list of inserting provisions related to PTR:

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§ S. 15 read with 155                                  Income from property
§ S. 113B                                   Widening the scope of retailers
§ S. 151                          Bank profits except government securities
§ S. 153                                On supplies, services and contracts
§ S. 154    Exports - scope extended to export-related indenting commission
S. 233              Scope extended to brokerage/commission to non-residents
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The question is where are we heading to? Of all the above-mentioned provisions, the one related to house property is most absurd as it defies all sense of logic and fairness. This means that a landlord idling his time will get away by paying a meager 5% on his gross rentals while a hard-working salaried individual will have to bear the brunt of heavier rate of taxation?
The following two examples showing same amount of income (Rs 2.5 m) for tax year 2007, in respect of a salaried person and a property owner, are enough to elucidate 'equitable concepts' of our policy-makers.

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                     Income from property
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Normal tax @ 25%                                 Rs 625,000
Tax @ 5% as proposed in budget                   Rs 125,000
Relief in tax                                    Rs 500,000
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Example-II
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Income from salary
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Tax @ 16%                                        Rs 400,000
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One wonders if the property owner is being rewarded for his indolence while a salaried person, punished for his diligence! What are we encouraging - laziness, luxurious indulgence, conspiracies, crimes against the weak, taking money for granted and fanning arrogance? Where are all those thought-provoking ideas: "an empty mind is a devil's abode" etc.?
Have we ever once considered what effect our short-term practical convenient measures in collecting tax will have on the character of our youth? What kind of legacy will the landed aristocrat leave for his children? That he made money without effort, without sweating and in connivance with imprudent tax collectors.
These things are not to be ignored and no sane government can afford the growth of potential trouble-makers enjoying colossal incomes without as much as raising a finger.
One shudders to think what kind of society will it be, whose members have no clue about struggling in life, of achieving high goals, of pursuing research for benefit of mankind, of toiling hard to provide their children with a better quality of life and to make them realise that things do not come easy.
Conversely, the ones trying to make both ends meet are being relentlessly pursued to pay more and more taxes. Whether he is a labourer, a white-collared executive or an industrialist, it cannot be denied that all have to make tremendous effort to earn their living.
They all suffer from day to day stresses and tensions yet continue to toil so that their families can live decently. Fruit of labour cannot be denied by snatching from the mouths of the starving to feed the greedy, the selfish and the unscrupulous.
Last but not the least, with every Finance Act, we brag about doing wonders for the poor of this country but what is actually happening? The entire load of taxes is being shifted on the poorest of the poor. Factually, it is he who is paying for our luxuries. Policy-makers are doing their utmost to:
1. subject this nation to abject poverty by depleting its soil of all fertility;
2. bonding it into slavery or modern-day neo-colonialism;
3. imposing the demon of consumerism by entangling them in the web of credit card, consumer loan debts; and
4. widening the gap between classes to a frightening level.
Had we adopted and followed a more consistent tax policy, we too would have achieved substantial progress. Now that the citizens of this country are awaking to the realisation that they must pay taxes honestly, our tax collectors are retiring to the comfort and ease of presumptive taxation and passing their burden of their own duty of tax collection to withholding agents.
What will such short-sightedness lead us to? It is high time to ponder upon the kind of environment we are creating for our children. Are we leaving them in a safe and secure haven once we depart from this worldly abode or are we accelerating their destruction?
Strutting with pride over a few short-term achievements in total defiance of all philosophical principles can play havoc with the fate of many future generations including those of the present-day rulers and their hand-picked henchmen.
All advanced and civilised countries of the world place greater reliance on direct taxation and that is the main reason why they have achieved levels of growth we can only dream of.