09/12/2016

Third World Economics

Third World Economics- 1

 

Third World Economics- 2

For this blog I am basing what I write on two cartoon images, both sketched by Maxim. I’m using two pictures because by looking at image no. 1 you can’t get the complete picture. By not looking at image no. 2 you can’t understand the context of the picture. Image #1 was published on August 08, 1999 whereas, image #2 was published on August 20, 1999. Both pictures were published in The Nation. This article will be more related to economics. I hope you will like it in a similar fashion to the way you liked my previous articles.

My View Of The Pictures:

It was the time when in Pakistan taxes could be imposed by the Government at anytime during the financial year even after the approval of a budget effective from every first of July of a year. In Pakistan we call such punches “Mini Budgets”. I always found it funny that in Pakistan the term budget means an increase in taxes though every one knows what budget actually means.

As I mentioned the event shown in the cartoon occurred in the year 1999. Surprisingly, Mr. Ishaq Dar was the Finance Minister in 1999 and he has the same portfolio in the current government. In picture #1 he is assuring the people of Pakistan that implementation of a General Sales Tax on Power, POL and fertilizers would not affect them and in picture #2 he is telling his Prime Minister that the change didn’t affect the public with nasty smile on his face.

Even the stupidest person on earth can guess that when you increase or impose taxes especially on power and petroleum products then prices of almost every product will also jump up. But rulers especially those of third world countries are less concerned about the problems and sufferings of common people. They are more interested in how to fill their personal kitty from the national kitty. Am I myself not stupid? I just mentioned about the procedures of rulers of third world countries. It would be enough to mention only one thing; either “third World countries” or “rulers interested filling their personal kitty” because those third world countries are third World because their rulers have the habit as I mentioned above.

Mr. Ishaq in his tenure of the 90’s increased and imposed indirect taxes and he is again in the Government doing the same. We found no change in his approach. Everyone knows that Governments run their affairs because of monies they collect in the form of taxes but there are two important questions from the tax payers. First, how much taxes should be levied? Second, are the monies of taxes being utilized for the public interest or for personal interests of the representatives of the people?

I like some of the traits of developed countries. One thing I like very much is their concern and care for tax money. Whenever any elected representative does a financially corrupt act or any act proven not to be to the benefit of the public, general public raise a question about whether that person who did the wrong actually misused taxpayer money. The public realizes the value of money they contribute towards their nation. Whereas in third world countries neither does the public realize the value of the taxes they pay nor do they actually pay the taxes honestly.

Mostly in developing countries governments focus on indirect taxes and duties (sales tax, custom duties etc.) compared to direct taxes (income tax etc.) because the majority of the public is not willing to pay taxes. It is a very interesting tussle over who should act first. The public argues that governments steal their tax monies and that’s why they will not pay the taxes whereas governments give the counter argument that the public are not paying the taxes which is why they can’t do anything. I think the public should not stop paying taxes. However, they should keep putting pressure on their elected representatives and make them answerable.

It is considered the worst kind of management of any government if it is totally dependent on indirect taxes because it shows the government’s failure to collect direct taxes from those who are liable to pay the taxes. It is very easy for government to collect indirect taxes. Indirect taxes are actually based on injustice. If one person is earning Rs. 10,000 per month and another one is earning Rs. 100,000 per month, they are paying the same amount of taxes irrespective of their earnings if they buy similar products. Justice means that those who are earning more should contribute more towards the society.

It is a viscous circle of bad management by governments and irresponsibility from the public. It is a very tricky thing to come out of but history tells us that when both parties start working together then things start to move in a better direction.

 

Poll of the Post

Will you keep paying taxes even after knowing that your government is financially corrupt?

Results

2 Comments on Third World Economics

  1. I say yes to the poll. Not because I’m loyal to the government but that I’m loyal to Pakistan. The second part which is not covered in the poll is more important, we should all pay taxes as it is the way a country runs. But DO ASK THE GOVERNMENT WHERE THEY ARE SPENDING THE TAXES. Put pressure on them and then only we can put our system on RIGHT TRACK. Well Nawaz government still has to inform public of the Qarz Utaro Mulk Sanwaro Muhim!

    • As only one question can be asked in poll thats why i asked the primary question :).
      Yes you are right. Qarz Utaro Mulk Sawaro was scam with no disclosure of receipts and payments made through this account.

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