Saturday, January 05, 2013

Tax Fights

In USA, we have political parties which wage political battles to the end in raising taxes; but generally there is not much 'political buy-in' for dodging taxes. (Mitt Romney may be from the rarefied strata where certain tax dodging via outside USA avenues may be a way of life; I guess that is a global phenomenon.) However, in countries like Greece and Pakistan, there is overall societal consensus that 'dodging tax' is very normal. Hardly 2% of Pakistani wage earners pay any kind of personal tax whereas in Greece folks continue to forget 'extremely poor tax collection' is one of the main reasons of that country's problems.  Unless lenders of Greece - IMF and EU - tie any further aid to more transparent tax collection; problem of Greece will not solve.

As far as Pakistan goes, there does not seem to be any clear way out of the problem since overall destruction of most state institutions is so complete and Pakistani Army has aggrandized most resources of the country so brazenly and tightly; there is much less hope there. 

I suppose along with corruption indices, we need more exposure and publicity for overall 'tax collection' picture for each country in the world and then international donor agencies like IMF, EU, Asia Development Bank, etc; can tie the aid to higher, better and wide spread tax collection along with reduction in corruption.

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