Re: A critical look at the Pak economy
Let’s recap our discussion we had and move on from here:
Saleem Saheb suggested the collection of revenue by federal government should be the basis of distribution also…which is a very absurd suggestion as it never happens in any country…for example income tax is collected in USA by federal government and is distributed according to the population…to move to this system as suggested by Saleem Sahib taxes must be collected by provinces and not by the federal government.
As I mentioned in my previous post that no province should be compelled to be a part of a particular system adopted by federation and if our brother’s in Sind feel that collection of taxes shold be the basis for distribution…we should change our laws accoordingly and make collection the basis of distribution…but to practically implement this system in Pakistan we have to restrict free movement of Goods from one province to another…and restrict market access from one province to another…in USA it is not required as the collection can be controlled at retail level as the transaction are formal and reported…in a situation prevailing in our country where it is impossible to control tax collection at retail level due to non reporting only way this suggestion can be practically implemented is to control the physical movement of goods and market access…
To give you an example POL sector contributes about 20% of total revenues of the federal government which are all collected in Sindh…in order to ensure the tax contributed by Punjab consumers is also collected in Punjab the only practical way is to physically control the movement of POL products in the country…
This system of major tax collection by provinces does not mean the provinces become indepedent countries…rather it means provinces are fincially more autonomous…
Punjab has no objection to this system as we are 55% of the population contributing 62% of GDP. GDP per capita urban/rural in Punjab is much higher than Sind…so we have nothing to lose if the suggested reforms are carried out with full honesty…ensuring the tax contributed by a particular region is actually collected also in the same region and are used for the development of the same region…
The sentimental talk about we are not chors and you are chors infact demonstrates lack of understanding of the affairs by some posters…who resort to this kind of statements…just to misguide people…
Now this portion of the post is suggesting a step forward and asking us (Punjab) to go independent in a very abusive manner…and not only suggesting that all the provinces become independent but also live like enemies…against previous suggestion of financially autonomous provinces living under same federation…/
Well if this situation ever arises…please be assured…and make no mistake that we are capable of handling our intrests…if ever Sindh tries to economically hamper us by denying port/transit services…we also have the option of not providing transit/storage facility for Sindh share of the water passing through our lands for free…probably we will get port/transit facility from Indian ports but…however this kind of talk and suggestion is highly absurd and will not benefit anyone…