Jannah Theme License is not validated, Go to the theme options page to validate the license, You need a single license for each domain name.

Why do we pay taxes?

Around the middle of spring you’ll hear the moans and groans of distressed adults complaining about income taxes. Sure, we all know that it’s legally required, but do we really know why a substantial chunk of our income is being handed over to the government?

Regardless of whether we give a sigh of approval or whether we think it is totally absurd, understanding the true purpose of taxation is necessary for all taxpayers. Where does your money go? Let’s find out.

In the smallest of nutshells, taxes are paid because the municipal, state, and national governments implement tax laws. Taxpayers’ money pays for government services of all kinds.

These governments are comprised of a number of parts: the legislators (those who make laws), executives (those who enforce laws), judges (those who decipher laws), and many others. The money received from taxes pays individuals who work for the government.

Although a legal requirement, paying taxes is also considered a civic duty. If you neglect to pay, the mediating body that oversees taxes (the Internal Revenue Service) will require that you do so,  else you might face penalties such as large fines or jail time.

Taxes can be found in a number of forms. Income tax is the amount you pay for working at a job. Depending on your income, a percentage of that money is withheld (removed from your paycheck and sent to the government). When you purchase items at a store, a sales tax is typically added to the price. Sales tax is a percentage of the cost of the good charged at the store. Owning property also requires you to pay taxes on the value of your property.

Lately, I’ve been thinking, we should not pay any taxes to the government of Pakistan.

All I have read (in the books we read in Pakistan) and seen (practically happening in developing countries) is that the government levies taxes on the public in return for some basic utilities and benefits that they provide to the public. In case of Pakistan, I don’t see any of the utilities/ benefits provided by the government for the welfare of the general public. Or let’s just say that I don’t see enough to warrant the governments right to demand taxes. Amenities like power, water, health, education, road infrastructure, affordable and reliable road and rail transport, public parks etc. Let’s see what our government has done on all these fronts.


This is a big issue. Not everyone has access to clean water and even those who have, you can never be sure if it’s pure or contaminated. And then there is the chronic shortage. What to talk about the rest, when the largest and most happening cosmopolitan “Karachi” has never had its problem of water resolved.


The condition of our government hospitals is not a hidden fact. Everyone knows the standard of hygiene and services available to the poor patients that end up in these hospitals. The fact is that due to the extremely poor standard of government hospitals, the marginally better condition of private hospitals is heaven for those who can afford them. But still, the dilemma remains that the government has no check on any of them.


The conditions in the education sector are as bleak as our health sector. They are perfectly comparable as the condition of public health is worst at best and the mushroom growth of private institutes is not solving the problem for the masses, as they are very costly. Second, there seems to be no real government control or monitoring of the standard of the syllabus.

Road Infrastructure

Pathetic would be an understatement. I don’t even feel like talking about it. Initially the roads are broken, then they stay that way for years, then the stones are thrown all over the road (with the metal road underneath), then again it is left like that for years (so that the passing cars may level the stones) and then finally the road is constructed in patches and breaks. Once the road is completed, two things happen. Either some other government department (Sui Gas or Wasa or Wapda or PTCL) will dig it up again for their cables or pipes, or – and this happens a lot – by the time everyone has had their share of digging it up the road will have become worn out over time. This happens faster if it rains or if there is over-flowing sewage.

Road and rail transport

I am sure our economists’ planners can easily see that one of the easiest ways of reducing traffic congestion and fuel imports is to increase the level, both the quantity and quality of public transport. This way more people will opt to not use their cars – as is the case in most developed economies with efficient public transport – there will be fewer cars on the road, less fuel consumed, less parking issues, less wait times at intersections and traffic lights with engines idling – and consuming fuel- and all of this can contribute to a reduction in the fuel import bill, which will help conserve our forex reserves.

Multiple taxations

And then there is the issue of multiple taxations. This is so convoluted and layered at times that it’s hard to figure out exactly how much tax we have actually paid on something.

Let’s take the simple example of say, a pencil. We pay for it, with income that is taxed at source. Then we pay sales tax on it. And in many cases, we end up paying sales tax on it even if the retailer is not maintaining proper books and that sales tax may never make it to the government. So not only are we subject to double or even triple taxation, the feeling that this will probably do no more than end up lining the businessman’s pockets is frustrating.

And it is even more frustrating when we are constantly barraged with the government saying that the economy is going through tough times and people need to pay taxes and be responsible and step up to the plate and all that. But at the same time, we see that the government will not reduce its own expenses unless forced into submission by a political ally or opponent. We see that the government keeps on saying that our trade deficit is swelling, and how petroleum imports make up a huge portion of it, yet government functionaries at all levels will not agree to use smaller cars, and even lesser number of cars. That the government is willing to impose high import duties on the import of small cars, but government functionaries frequently get duty waivers. That the government says that they want to increase tax revenues, but for some reason, any legislation that hints at increasing the tax base – and carries with it the suggestion that politicians or their allies might get hit – never seems to make it past the initial draft stage.

And it is predominantly the salaried class which ends up paying taxes regularly, while businessmen, industrialists and other self-employed often have the option of simply transferring any increase in costs to the end consumer, thus minimizing their own liability.

The very rich are getting richer while many of our wages have been stagnant or dropping for years. Especially if we rationalize it with inflation and calculate how far one rupee went five years ago, and how far it can go today. Based on those terms, the bulk of the salaried class actually makes less money today and their buying power has fallen.

So why do so many of us pay our taxes? Two hundred thirty or so years ago, in the United States, this was called “taxation without representation” and they threw out the government.

I believe that portions of everyone’s labor should contribute to the collective well-being of the community and that’s why I say that our current tax system is ethically bankrupt.

The issue here is about where the money is going, how it’s being spent, and how the spending decisions are made.

I am sure if the government can come up with honest answers to these questions, and convince the people that it is sincerely doing its best in the circumstances, more people will pay taxes, or at least the ones who already are will do so willingly!

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.