Most Pakistanis are averse to paying taxes because of the government's shortcomings
The state and the citizen have a contractual relationship based on the principle of trust. The nature of this trust is economic: between a creditor and debtor. When a child is born -- a new citizen arrives in the republic -- the state gives the credit of security. That is the original function of the state, because it has been taxing the parents of the newborn citizen. It means that the state was originally a borrower and now -- by providing physical, psychological and medical security to the newborn -- it is being a good borrower, by returning the debt of the taxes collected from the parents. At least that is the theory.
According to the second essay in Friedrich Nietzsche's book 'On the Genealogy of Morals', the entire system of morality is based on the credit of safety provided by the public sphere and the subsequent moral debt of the individual. It is the same relationship between the taxpaying individual (the lender) and the state (the borrower). When a state taxes an individual, it is making certain promises, which are supposed to be already public through various documents and codes, such as the constitution, the penal codes for the violators of the social contract, the bylaws for running social welfare departments and the healthcare policy, etc.
These documents and codes work as guarantees for the taxpayer or the lender. The guarantee is based on the assumption that the state cannot renege on its own promises, thus the individual readily pays the taxes. By the same token, the state derives the moral right to punish those who evade taxes.
In Pakistan, the entire system of trust has collapsed. The state taxes the individual, but does not keep the promises on which the right to tax the citizens is based. On their part, the citizens evade taxes because they have been betrayed time and again by successive governments, which have not been able to provide universal health care, education, social security, etc.
The average Pakistani citizen is virtually in a desert of social security, despite the fact that every cola bottle, every tea-bag, every pinch of salt, every drop of oil he or she buys includes several indirect taxes. If the citizen tries to avoid certain taxes, it is because of the deficit of trust on behalf of the state. This scribe has seen the working of many social welfare states, which was also the ideal form of the state as expressed in many founding documents of this country, and the citizens of these states are often satisfied with the facilities and utilities they are receiving in return for the taxes they are paying.
For the entire year of 2007, I paid my taxes in Germany. By Nov 2007, the state started declaring publicly that it had achieved the annual tax target, thus Dec 2007 was going to be a tax-free month for the salaried class. This was a level of transparency I had never experienced in my own country and the pay for December arrived without any tax deductions. Moreover, the taxes I had started paying by working in the German economy had also entitled me to a health care card that worked in the entire European Union. It meant that for paying taxes in Germany, the German government was making sure that I was also going to be looked after in Portugal, Spain, Iceland, Norway, etc, regardless of the cost of treatment in those countries.
Now look at the difference in the promises we read in government documents as incentives for paying taxes and the actual delivery of those promises. For example, there is not even a single footpath in my locality, Mozang, which is suitable for walking. It makes me think that the Clause 9 of the 1973 Constitution ("No person shall be deprived of life or liberty save in accordance with law") is a false promise. My lungs are not safe when I walk on a road because of all the smoke. My ears are not safe because of the noise. My entire being is not safe when I walk on a footpath. Therefore, the burden of proving the Clause 9 of the Constitution a true and believable promise rests with the state, so that I am happy when I pay my taxes.
In Bangladesh, the Bangladesh Environmental Lawyers Association successfully argued a case against environmental pollution by citing Article 32 of the Bangladeshi Constitution: "No person shall be deprived of life or personal liberty save in accordance with law." The argument was based on the universal agreement that environmental pollution is dangerous to human beings; therefore, the constitutional "right to life" also inherently contains the right to clean air, clean water and a healthy environment. The court, in its decision, directed the government to control pollution in the country.
When the state does not keep its promises and still continues to extract revenue by direct and indirect taxation levied on its citizens, is it not an immoral state similar to the criminals who rob and steal? What options do the citizens have when dealing with an immoral and untrustworthy state? To solve the problem posed by the trust deficit on behalf of the state, various political theorists have suggested different solutions.
Herbert Spencer, for example, argued in 1884 that the citizens should be given the right to ignore the state too in the same way as the state ignores them after extracting taxes. He called it the Right to Voluntary Outlawry, because "citizenship involves payment of taxes" and because the state is "simply an agent employed in common by a number of individuals to secure to them certain advantages, the very nature of the connection implies that it is for each to say whether he will employ such an agent or not." Other political theorists have also argued that the citizens have the right to stop paying taxes if they think the state is not fulfilling its promises.
Therefore, the burden of proof, after repetitive betrayals, is on the state of Pakistan. The state has to prove that it is a trustworthy, promise-keeping borrower before it goes to the citizens again for taxing them in the next fiscal year. If the state continues to break its promises, it should also allow citizens the option to opt out of the mutually binding social and moral contract. After all, the public sphere is supposed to be fair, transparent and un-exploitative.
Published in The News on Sunday
dated June 07, 2009