Taxation And Representation Are Not Mutually Exclusive Extreme Positions
NO TAXATION WITHOUT REPRESENTATION: The Fundamental Slogan underpinning the American Declaration of Independence 1776.
NO REPRESENTATION WITHOUT TAXATION: The Fundamental Slogan of the Imran Khan regime presiding over a debt-ridden, virtually bankrupt Pakistan 2019.
Superficially a diametrical contrast exists between the slogan which fired the imagination and mobilized the white settlers in the 13 colonies established in North America and the desperate measures which Imran Khan has resorted to in order to prevent the insolvency of the Pakistani economy.
The 13 colonies in North America were till 1776 simply possessions of the British Crown. The British State taxed and monopolized trade and commerce from London but the colonies were not represented in the British Parliament. It was against such a rapacious relationship that the colonies rose in revolt and threw off the British yoke and established the United States of America.
Pakistan, as soon as it came into being, embarked upon an ambitious plan to acquire economic and military aid from foreign donors. Till the middle of the 1960s the economic growth in Pakistan was impressive – faster than India which was being modernized within a state-led capitalism, which provided it with the industrial infrastructure upon which it later developed rapidly in the 1990s.
However, after Pakistan started the 1965 war a halt to economic growth took place in Pakistan and although thereafter some spurts of rapid economic growth took place, as for example during Zia and Musharraf rule, but such growth was not accompanied by expanding and cumulative industrialization. Much of it derived from money pumped into the economy by those military rulers from what they acquired from foreign powers as well as export of primary products such as hides, rice, cotton and so on.
The so-called restoration of democracy in 2008 saw five years of PPP-led government in which corruption broke previous records and the election of Nawaz Sharif as prime minister broke those records the PPP-regime had bequeathed it.
When Imran Khan came to power, no denying with the help of the Pakistan Army or the Establishment, he had to swallow many populist slogans, such as about committing suicide but not going on knees before the IMF.
Once in power, he did exactly the latter, knocked at several capitals looking for aid and finally capitulated to the IMF, which has compelled him to drastically expand the taxation base for the state to run its affairs.
I think Pakistan has no choice. One of the abiding lessons of history is that a state which overspends than what it earns ultimately disintegrates. That is what happened to the Soviet Union, even though it was a nuclear superpower.
Pakistan, like Greece recently, must generate resources by taxing business, trade, commerce but ALSO BIG LANDHOLDINGS if it is ever to recover from the decline which has beset its economy.
I fully agree, the Pakistan military, too must cut drastically its spendings on defence. One way to do is to seek good relations with neighbours and to keep out of armed conflicts and wars on behalf of foreign powers who have historically found Pakistan willing to fight their dirty wars for the money given it.
One big objection people have is that since Pakistan is a thoroughly corrupt state and society what guarantee is there that the taxes will be used for productive purposes? The notoriously corrupt officialdom can simply use the taxation measures to loot the people without returning anything to them.
So, at bottom is a concern about transparency and good governance.
I find a dialectical or interdependent relationship between taxation and representation.
They are two poles of the same continuum rather than mutually exclusive extreme positions.
No doubt the tax burden is very heavy and the impoverished people of Pakistan will be subjected to great suffering for some time before the economy can be brought into some sort of balance and stability.
Pakistan must revive its industrial production. CPEC may be very good but it should not mean another round of dependence, this time on China.
Pakistan should seek peace and turn inside and make the people of Pakistan the prime object of its concerns and responsibilities.
The writer is Professor Emeritus of Political Science, Stockholm University; Visiting Professor Government College University; and, Honorary Senior Fellow, Institute of South Asian Studies, National University of Singapore. He has written a number of books and won many awards, he can be reached on [email protected]