Pakistan Unrest Growing Amid Bid To Boost Taxes

With Pakistan making a show of knuckling under the dictates of the International Monetary Fund, the question is whether the crisis-ridden government can possibly live up to the deal.All the IMF wanted before allowing Pakistan’s desperate regime to tap into $7 billion in funds to cure its latest economic ills was to bite the bullet on a tax hike. Finally, Prime Minister Sharif signed off on a promise to collect the equivalent of $640 million in shaky Pakistan rupees.The rationale seemed to be to do anything to avoid going into default while facing incipient revolt and dealing with the damage done by devastating floods. Yet who’s to say the government can really collect the funds?In a country of more than 240 million people, slightly more than 2 percent of them are on payrolls that technically require them to pay taxes, and only about 1 percent actually cough up. Good luck with getting nearly all of those eligible and legally subject to taxation to file. As for the rest of the people, they’re not even thinking about taxes while scraping together enough to get by day by day.All of which contributes to moods ranging from simple unease to dangerous unrest in a tiny moneyed class that was exploited by Mr. Shahbas’s predecessor, Imran Khan, the acclaimed one-time cricket star who was ousted as prime minister last year.“There is a growing sense of grievance among the Pakistani urban salaried classes and corporates that they bear the burden of generating a disproportionately large part of direct taxes,” Javed Hassan writes at Arab News. “Many other affluent segments of society with vast amounts of wealth that generate considerable income stubbornly refuse to contribute taxes to the national exchequer.”Economist Ehtisham-ul-Haq sees “no other way out” for Pakistan but expects “tough days ahead” for most people amid skyrocketing prices. “Pakistan needs the IMF loans,” he told the Associated Press, amid “higher food and energy costs.” So what happens if forces coalescing around Mr. Khan exploit the country’s suffering and rise up against the government? In the end, it’s the army that exercises the ultimate power, but that’s not easy to impose in a troubled society where Islamic extremists exercise local control and often carry out their own harsh sentences against those found guilty of “blasphemy.”That’s a combustible mix that Mr. Khan would love to exploit in a bid to regain power after losing a no-confidence vote in the national assembly.Not known for coming up with real solutions during his stint as prime minister between August 2018 and April 2022, Mr. Khan has nevertheless opposed the decision to bow to IMF demands, which he blames on American pressure.The IMF mission chief in Pakistan, Nathan Porter, laid out conditions that will be difficult to abide by. “Key priorities include strengthening the fiscal position with permanent revenue measures and reduction in untargeted subsidies,” he said, calling for “social protection to help the most vulnerable and those affected by the floods.”Good luck with that, too. As Patricia Grossman of Human Rights Watch observed, “Millions of Pakistanis have been pushed into poverty and denied their fundamental social and economic rights.” Now, she said, “the IMF and the Pakistani government have a responsibility to address this crisis in a way that prioritizes and protects low-income people.”

Pakistan Unrest Growing Amid Bid To Boost Taxes

Pakistan Unrest Growing Amid Bid To Boost Taxes

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