Taxman’s powers of arrest

TODAY it will be the third day of a line-by-line deliberation over the budget in both the National Assembly and the Senate committees, and the revenue plan brought by the government is sparking a justifiable pushback by the lawmakers. Nobody likes taxes, so any plan to raise taxes anywhere will raise objections. But some objections carry more merit than others. In this budget, the government is seeking to raise incremental tax revenues of Rs600 billion via new measures, and the finance minister has proudly told us that Rs400bn of that will come from “enforcement measures”. That’s two-thirds of the new revenue mobilisation that is going to be squeezed out of those who are already compliant and paying their taxes. That’s not a plan. That’s a hit job. In response, the lawmakers have started questioning the powers the tax authorities are demanding. Chief among these are powers to arrest being given to the FBR. And herein lies an interesting story.