By Zeeshan Shah/KARACHI: The World is getting poorer and poorer while few wealthy people get filthy rich. Worldwide Bad Governance remains to be the primary reason for income disparityglobally, while the status quo dominates the filthy rich segments of a powerful hidden society.
According to a recent report by OXFAM UK, around sixty two filthy rich people own as much as half of the world population. Estimating around 7.6 trillion dollars hidden in tax havens, these people have been evading taxes depriving governments globally of over 190 billion dollars in tax revenue every year.
Super-rich individuals saw an increase of 44 percent since 2010, taking their cumulative wealth to $1.76 trillion – equivalent to the total owned by 3.5 billion of the world’s poorest people.
Oxfam Australia’s Chief Executive Helen Szoke said: “We believe there is a need for commitments from global business leaders and political leaders for major tax reform to get rid of the tax havens.” This spells disaster for the global revenue stream that controls income generation due to heavy amount of tax evasion, creating massive disparity between the rich and the poor. Referring to economic growth in Western countries, such as her native Australia, Szoke said little wealth was reaching the impoverished. The equal distribution of wealth is one of the key challenges affecting Australia and many such countries where the wealth does not reach the poor and there is zero trickle-down effect.
As economies dry up while war rages in most emerging nations, such heavy tax evasion numbers predict a gloomy outlook as things are expected to take the turn for the worse this year where recoveries become tough. In a world where one-in-nine people go to bed hungry every night, we cannot afford to carry on giving the richest an ever-bigger slice of the pie. Rich getting richer at the expense of the people who are dying of hunger and environmental threats every day.
In Pakistan, tax evasion is not considered a crime simply because the government does not condone it and the rulers themselves evade taxes. Constitutionally, a government servant must not have vested business interests and promote business while serving on the corridors of governance. It is a conflict of interest. How can a thief do his own checks and balances and assign blame to oneself. While earing billions in profits, they do not even pay 1% tax equivalent of the accumulated wealth. Recent cases of gross negligence by provincial and federal government of Pakistan indicate foul play in the name of democratic justice and fair governance.
Newspapers are full of news from all over Pakistan on corruption. Recent setbacks in the province of Tharparkar, over 50 children have lost their lives in hospitals unable to provide timely emergency health care, while billions of funds have been devoured by the bureaucracy and the government officials. Over eighty children still remain under treatment, with many in critical condition. The area is a desert covering over 120000 square miles as the Indo-Pak territory. All these funds that are officially meant to allocated to hospital equipment, emergencies relief, medicine and health care centers is being eaten away in massive chunks by the officials in-charge there.
The people of Pakistan pay taxes to ensure minimum health care facilities where as here in the country, not even the children are saved from sudden death due to highly corrupt practices and basic incompetence on part of this government. In this 15 percent of desert population that lies in Pakistan, we have one of the highest infant mortality rates in the country. All because the rich are accumulating wealth that belongs to the state machinery, vandalizing the machinery and then not evading taxes on illegal wealth. Worldwide, law makers are looking into this serious offense with maximum capital punishment while in Pakistan, tax evasion is rampant thus leading to other such disaster situations that are not given importance. Local authorities have failed to satisfy the rising hysteria.
World Economic Forum in the Swiss city of Davos meets later this month to crack down on tax havens, ensure fair wages, and invest in public services. It is expected that a suitable solution is thrashed out by identifying leaders around the world who have failed to curb corruption and are leading it themselves while being in power. Many such examples exist where the legal system has failed to protect the basic rights to life – for the citizens of poor countries. This becomes the recipe for civil war arising from the failure of governance and civil rights violations.
While the civil society remains silent on such human rights violations, the rich get richer whole the poor people continue to die. In order to further investigate the nature of the beast, it is imperative that the state implements impartial justice and brings the tax evaders to light, by exposing economic corruption and terrorism. While billions of rupees are being spent on building rich houses for the already corrupt, the lesser fortunate segments of society are being robbed off their hard earned money paid in heavy taxes by the governments who then steals from the generated revenue in taxes by tax evasion and money laundering using legal channels to stay under radar. Nations are at war due in a fight for resources. Yet, countries like Pakistan and other such developing nations resort to corruption despite getting massive funds for allocation to health care, education and housing.
Pakistan has one of the lowest Tax to GDP ratio in the world and it is easy to see why. Our Prime Minister is a businessman who pays nominal taxes and is the richest man in the country, for example. Many others like him are indirectly involved in fueling tax evasion. No one holds them accountable. No one can. This disease is top-down hence it is a trickle-down effect leading to increased tax evasion in every possible layer of governance. Tax evasion is a disease that requires comprehensive surgery as it is hidden cancer that kills slowly.
Globally, death and taxes are a reality that is imminent. Yet in some places, we are still leading medieval lives, forced to live in slavery. A country that is enslaved by its own rulers has little hope towards progress. Unfortunately, accountability is much below the required expected levels. If the WEF can identify solutions for the rich, it can certainly identify measures to curb this growing crisis of the poor nations. How long this will carry on we do not know but we do know that the masses are restless and in deep grief over countless tax evaders, who steal what is the right of the citizens of Pakistan.
Crackdown on tax evasion is the key to progress in many countries and we must start now to protect the state and its citizens or else such instances will keep on happening due to the lack of justice and accountability and the ever growing trend of earning billions through no direct checks on tax and the influence of corruption within government.
Zeeshan Shah: Comments on Global Affairs, Public Policy & Governance. ( Twitter@shahzeus)
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