Law opinion
Ineffective tax structure: Byproduct of unfair play
Barrister Nazmus Saliheen
OUR tax structure, being responsible for the most important aspect of the country, fails to prove its efficacy in reality; which is evident for our day-to-day socio-economic picture.
We have numbers of law to secure our revenue collection, most of which proves to be faulty, people managed to by pass those laws and large amount of money remains out side the revenue structure. And we the citizen of the country forced to accept the process of whitening black/undisclosed money an illegal but state recognized phenomenon.
Game with the tax structure is an open secret which internally has been played by three groups first assessee, then mediators and finally by the tax administrators. The assessee and the mediators are only taking advantage of the scope of unfair play systematized by tax administrator and also by an external entity, the auditors a professional group who holds and most effective but remotely controls the corporate tax structure; they assists the corporate world with a witty technology of 'documentary truth' to turn a lie to a 'documentarily true' (here we are only talking about the 'unfair players' of the tax structure; of course our country has numbers of fair tax administrator and auditors who are contributing to the state economy at a large extent with their honest effort).
We have criminal measure to penalizing government administrator for any unfair use of their office; have criminal measure to restrict intentional tax evasion and intentional misstatement of the assets; both income tax practitioner and auditors are under professional burden to act honestly for the benefit of the society. All these laws prove to be ineffective. Most probably the players are getting the penalty for violating the measure as negotiable with the loss they would have suffered if they were being convicted under those measures.
In that case we may suggest for a direct civil burden with a high degree of penalty provision on the tax administrators and auditors to act reasonably as per the spirit of the law; if they fail to comply with the provision the aggrieved person or body may bring direct action against them to act reasonably (in its legal meaning) as per law. Under this civil burden they may be induced to look into the spirit of the law and also to assess the impact of tax avoidance on the economy of the country.
In order to set the penalty we can follow the Islamic or Classic Criminology concept where it is said that that in order to inhibit any person from availing scope of abuse the penalty must be extremely higher in comparison to the comfort he would have gain from the act of abuse.
We are suggesting this heavy burden on these two unfair players of tax system just to have a grip on them; and in order to make the system efficacious we have to have that grip at any cost.
If we fail to get a grip on the players of tax system we will obviously fail to get an efficacious tax system. How many times we will offer the illegal scope of whitening money to the corporate world in order to secure sufficient currency flow within the country? They have been given this scope several time in the past but it shows its ineffectiveness to secure the same; every time they have been given the opportunity some money have come to flow but the system remains there to produce more with its scope of unfair play and some unfair players who are ever-ready to avail of the scope.
We have to be very strict in the matter of collection of revenue - revenue is the blood stream. If we fail to ensure the proper circulation of it, our death as a state is obvious; in that case we will be forced to depend on external-life-support (external aid like foreign loan or donation) and to live as living-death. So we have to have a grip on the tax players as soon as possible and at any cost.
Barrister Nazmus Saliheen is Chairman of ANM Associates.
