Seminar in Public Management“Inequalities in the development funds distribution in Punjab…..Drivers, Motives and Consequences”

50 shades of inequality in Pakistan

(Article in DAWN)

AUTHORS

ZOFEEN T. EBRAHIM  HUSSAIN ALI 

 UPDATED MAY 14, 2015 02:40PM

Presented By:Ayesha SajjadAyesha Sarfraz

Everyone wants a "naya" Pakistan. Many dream it to be a Dubai-look-alike…....

- a perfect mix of east and west; others wish it to be more orderly like Singapore, where littering, daubing graffiti, jaywalking, spitting, urinating anywhere but in a toilet are offences and

come with a penalty.

Introduction

Upward mobility - rich remain rich:

Inequality traps

Education in Pakistan:

Cont…..

Gender Inequality: The female labour participation rate is 18%. Share of the female labour force in the total agricultural has increased to 30% since 1980. Women own less than 3 per cent of the land.-

Cont…..

What does extreme inequality do to society?

Social scientists say inequality:

Can the pendulum swing?

We also asked a few people if they were asked to put things right how would they go about it:

Implement land reform; Enforce wealth and income tax collection; Decrease indirect taxation; Enforce minimum wage; Create microcredit opportunities; free quality schooling till Matriculation; create vocational skills centers;

(Dr Pervez Hoodbhoy)

Abolition of inequality can never be a rational objective, as different people and regions have different endowments", still inequality is not written in stone; it can be minimized.

Raise direct tax base, Reduce indirect taxes, Abolish absentee farming, Raise public expenditure on low income housing and utilities (water supply, sanitation), Public transport, Education Health

(Dr Kaiser Bengali)

Cont…..

Household surveys

InflationTaxation

Recommendations

 The Government can reduce inequality.

Level the playing field

Check rising inequality through tax reforms

In Pakistan, in 2013-14, nearly Rs 500,000,000,000 were lost due to tax exemptions. This is more than 1.5 times the total education budget of Pakistan (Oxfam report March 2015).

A tax of just 1.5 per cent on the wealth of the world’s billionaires, if implemented directly after the financial crisis, could have saved 23 million lives in the poorest 49 countries by providing them with money to invest in healthcare. (Oxfam report)

Out of 1,169 parliamentarians, only 1,040 have filed tax returns for the Fiscal Year (FY) 2013-2014 according to the Parliamentarians Tax Directory (PTD) by the Federal Board of Revenue (FBR).

Five prominent parliamentarians missing from the PTD • Murad Saeed • Ghulam Rabbani Khar • Makhdoom Amin Fahim • Arif Alvi • Sharmila Farooqui

Naming and Shaming does work

Tax compliance in Pakistan is pathetically low and what's even more unfortunate is that the average Pakistani does not even know or care about it and clearly reflects on the people they elect.

“Under every stone is a story on how people find ways, mind you through legal loopholes, to wiggle out of paying taxes. Yet journalists fail to investigate or write about these tax cheaters,“.

"It doesn't require any rocket science to see the lifestyle they maintain and the paltry sum they pay as tax, just see the parliamentarians tax directory published by the FBR, for the year ended 30 June 2014. It's just a matter of connecting the dots.“

(Umar Cheema)

Cont…..

Only a third of the country's 446 federal lawmakers bothered to file income tax returns that year. (Report by CIRP) Through the new tax reforms consumption taxes should be made less regressive. Insulation of FBR from politics Dependency of FBR New tax reforms

(Oxfam report)

Cont…..

Why potential tax payers cannot be brought

under the tax net?

Income, education and educational choice are linked together, reinforcing one another and unless there is intervention through provision of education (if the government focuses on quality of education, and in particular girls education, and taking it to scale) since research suggests there are higher returns on this, the cycle of inequality will continue.

Breaking the cycle