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BR Research

For nations sake

Published August 29, 2011 Updated August 29, 2011 12:00am

"Patriotism consists not in waving the flag, but in striving that our country shall be righteous as well as strong" said the renowned American inventor, James Bryce. It appears his words are echoing across the globe, fifty years on as nations look to redress their social contracts in the wake of the current global economic slowdown.
On Wednesday, 24th August 2011 the Financial Times reported that "some of Frances wealthiest individuals including the LOreal heiress Liliane Bettencourt, have called for a tax on the rich in a gesture of national solidarity as the government prepares to announce swingeing cuts to bring public finances under control".
A petition calling for an "exceptional contribution" from the most affluent of the countrys citizens has been signed by "16 executives and wealthy investors" which include the likes of Christophe de Margerie of the Taittinger family and the head of Publicis; Maurice Levy.
In fact calls from within the most well-off segments of society have gathered pace across the Western continents as economies reel from the economic crisis and governments mull measures to roll back their expenditures.
A few days earlier, US-based billionaire investor Warren Buffett had also carped that the effective tax rate he is liable to pay is actually less than that faced by many of his own employees. Buffett had also urged the US government to consider taxing the wealthy before considering steps to cut social spending.
Pakistan too is faced with a dire economic crisis. The war against terror has milked the national coffers, while terrorist attacks have taken a mammoth toll on the countrys infrastructure besides usurping hundreds of countrymen of their lives.
Economic growth has slowed and the cash-strapped government has shelved myriad developmental projects even as economists and industrialists alike urge measures to spur employment and growth.
The countrys burgeoning tax gap stands at 79 percent, according to a research conducted by the Andrew Young School of Policy at Georgia State University. The governments own figures show that total fiscal revenues as a percentage of GDP actually dropped from 11.8 percent in FY91 to 10.1 percent in FY10.
Speaking to BR Research, prominent businessman and politician and Chairman of the JDW group, Jehangir Tareen said that, "the response from the wealthiest nationals of France shows maturity and a sense of responsibility among those who have benefited most from that countrys progress".
Alluding to the lack of trust between the private sector and tax authorities in Pakistan, he said that "our country needs a new covenant, a change in morality" that compels the affluent to pay their dues to the country.
Yet the restructuring of the social contract which many analysts feel is so direly needed; may well be a simple remembrance of the coutnrys own culture and history. Writing for the Fiscal Review released recently by this publication, Khadija Balkhi reminded that "in a nation that spanned three continents", leaders "chose to own only one pair of clothing" and aspired to ensure that there would remain no one to give Zakat to.
As for the argument that tax money is only squandered at the whims of politicians. Bureaucrats and the like; the onus of responsibility must again lay with the people for it is the governed who choose their leadership and finance their actions.
Just as the western nations attempt to grapple the inequities in their societies, Pakistan too has to slay its demons. Instead of the witch hunt that many drawing room conversations allude to, the nation needs to take a leaf, if not from recent developments in the west then from our own past. That road may eventually lead to just and equitable governance, but it must commence from an individual understanding that self interest can be better served through actions that are beneficial to society as a whole than by those that are detrimental to our national interests.

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