Only 2.05% people actually pay tax: Report

KARACHI: Pakistan has 180 million population. The country has only 3.7 million tax registered people while 2.05% people actually pay tax. Landlords, most of them parliamentarians, do not pay real agriculture tax. Industrialists and businessmen are also not paying due taxes. They want imposition of full agriculture tax on landlords. Due to tax evasion by influential, Pakistan economy is always weak, inflicting blow on the purchasing power of people.

According to a study conducted by PPI, Pakistan is rich of agriculture, textile, water and food and other natural resources. Almost everything of human need is available in the country but unfortunate is that most of leaders and bureaucrats have plagued the national economy through corruption, according to a study conducted by PPI.

British Raj distributed lands of the subcontinent among influential people in a bid to prolong their rule. Thousands of acres of land were distributed among each influential. As a result, these people supported British rule.

After the establishment of Pakistan, these influential people became very powerful and captured parliament houses of the country. They passed many laws in their favour in order to get full control on the agriculture lands and avoid reasonable taxes. At that time, there were few industries and agriculture was major source of Pakistan’s economy which was under the control of these lords.

Pakistan inherited feudal system from British Raja. Land distribution in Pakistan is highly unequal as 5% of large landholders possess 64% of total farm land and 65% small farmers hold 15% of land.

The large land holders have all political powers and economic advantages. About 50.8 % of rural households are landless while the poverty amongst rural landless people is high. Power of landowners is really a monopoly that has served as a barrier to social and economic progress for poor. Land reforms are required not only to accelerate agriculture growth, but also to prevent the developing social crisis associated with the poverty and disempowerment of peasants in Pakistan’s rural society.

The previous waves of land reforms in 1960s, and 70s were half heartedly implemented by governments but they largely failed to deliver in practice. In other words land redistribution did not bring equitable distribution of resources in the rural economy.

Landownership patterns are highly skewed in nature in Pakistan with large number of farmers own less land, making this a challenging task to trim down the socio-economic and political influence over services of small numbers of large land holders.

Absentee landlord system has contributed little to production but extracted as much as possible from the sharecroppers (haris) who cultivate the land. In future the existing socio-economic structure that provides disproportionate power to large landlords will continue to exist unless institutional support by the public sector is targeted to small farmers.

Even if access to information and capital for acquiring modern technology is equally distributed, the large farmers are likely to gain more absolutely from technology than the small farmers due to rising costs of technology. It is widely accepted that redistribution of land to small farmers leads to greater land productivity, improves macro-economic performance, ensures distribution of income and reduces poverty.

Land reforms need to be viewed in the larger context of agrarian reforms that enable efficient joint cultivation, extension support, and most important, a fair contractual relationship to the tenants and share-croppers of large landlords. In addition, such reforms need to take off where the last reforms left off to ensure continuity.

Land reforms were an unfinished agenda. Pakistan has experienced three attempts of ineffective land reforms in 1959, 1972 and 1977. Redistributive land reforms (states takeover of land from large landowners and its allotment to the landless farmers) did not achieve a great deal due to the political power wielded by the landowning classes.

Food security in Pakistan has also become a big challenge. Food security is when all people at all times have access to sufficient, safe, nutritious food to maintain a healthy and active life. Those who don’t have this access are called food insecure. Food also insecurity means people in hunger or at risk of hunger. Sixty percent of Pakistan population is food insecure. Balochistan has 61.2%, Khyber Pakhtunkhwa 56.2 % and Sindh 72%.

Corporate farming has also badly affected the country because country land is sold to foreigners who use our land, grow crops and shift all production to their countries which causes food insecurity. Some statistics said the UAE has purchased 324,000 hectares of farmland in the Punjab and Sindh provinces of Pakistan in June 2008. Investors from Abu Dhabi bought about 16,000 hectares of farmland in Balochistan.

Emirates Investment Group and Abraaj Capital are also investing directly in corporate farming. Such kind of purchasing is a land grabbing which will deprive local people of land and cause food insecurity

There is need to create honest leadership in Pakistan to end corruption, formulate public friendly economic policies, raise tax ratio, impose agriculture tax on big landholders and bring all rich class people to tax net.

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