Modern-day Slaves

Shifting the burden of its responsibilities on withholding agents, the federal government remains insensitive to their woes

By Huzaima Bukhari and Dr Ikramul Haq

"The only people who do not have to pass the Civil Services exam to work for the government are the withholding agents." (Anon) The federal government retains two percent as collection charges from all the provincial governments on General Sales Tax on Services, which it collects on their behalf (Para 9.6 at page 42 of Explanatory Memorandum on Federal Receipts 2006-2007).

On December 10, 1948, the General Assembly of the United Nations adopted and proclaimed the Universal Declaration of Human Rights, to which Pakistan is also a signatory. Following this historic act, the UN General Assembly called upon all member countries to publicise the text of the Declaration, and "to cause it to be disseminated, displayed, read and expounded principally in schools and other educational institutions, without distinction based on the political status of countries or territories." The failure to implement these instructions by the Pakistani authorities is another ghastly, grisly and hideous story.

Article 7 of the Declaration reads: "All are equal before the law and are entitled without any discrimination to equal protection of the law. All are entitled to equal protection against any discrimination in violation of this Declaration and against any incitement to such discrimination." This principle is also enshrined in Article 4 of the Constitution of Islamic Republic of Pakistan. In civilised societies, laws are supposed to apply equally to all the citizens and legal entities, without even an iota of doubt that one segment of society of class of people is being given preference over another.

Though such an ideal situation appears utopia, yet the responsible and representative governments, wherever possible, try to implement these. One finds no apparent or plausible justification for their non-enforcement. For example, it would be incorrect to accuse a hangman for murder or manslaughter when he pulls the noose around the neck of a convict, because he is merely carrying out the court's instructions; or to file a case against a police officer for assault and battery where he attempts to arrest a criminal, because he too is just performing his duty. No doubt, some laws may have different implications for different people, but generally there is a consensus that they should be non-discriminatory.

The implication of this is that barring a few issues related to essential services, what is good for the federal government should be equally good for the provincial governments and other corporate / non-corporate bodies too. Hence, if the federal government is entitled to retain two percent as collection charges from all the provincial governments on general sales tax on services, which it collects on their behalf, then other bodies should also have the right to retain the same percentage (if not more) on collections they make on behalf of the federal government. After all, cost incurred to carry out such obligations is separate from the expenses that are borne in the course of normal administration or businesses!

When the federal government has entitled itself to compensation (duly endorsed by the Parliament) for work that it does for others, then what prevents the legislation for similar compensation to those who toil relentlessly in collecting massive amounts of taxes for the Centre's treasury? This (mal)practice on the part of federal government constitutes not only forced labour, which is unlawful under Article 11(3) of the 1973 Constitution, but is also tantamount to modern-day slavery that is prohibited under Article 4 of the Universal Declaration of Human Rights: "No one shall be held in slavery or servitude; slavery and the slave trade shall be prohibited in all their forms."

One does not have to be a proclaimed slave for falling in the category of victim of slavery. In fact, it is the substance of the matter (nature of a job) that determines emancipation or otherwise. Therefore, when the federal government obligates withholding agents for collection of taxes on its behalf, it must bear in mind that these agents will have to spend substantial money to fulfill the imposed duty. This involves, in case of the corporate sector, an exclusive department with its own set of employees and other infrastructure that consumes a hefty chunk of their gross profit, which eventually leads to reduction in overall business profits and dividends. Of course, if any laxity or default is committed in the course of this bonded labour, then the withholding agents are subjected to penalties, additional taxes and even prosecution.

Shifting the burden of its responsibilities on withholding agents, the federal government has the audacity to remain insensitive to their woes. Over the last few years, it has been observed that with each passing day not only is this burden increasing but strong coercive methods are also being introduced to supervise their activities.

The Finance Act 2008 has inserted a new authority, the Directorate General of Withholding Taxes, in Section 230A of the Income Tax Ordinance, 2001. This directorate will exercise unbridled, unfettered and unlimited powers in whipping and lashing the 'withholding slaves', forcing them to submit to their masters without as much as raising a meek voice against them, what to talk of demanding some compensation for their labour. How else can a picture of slavery be painted? If this were not bonded labour, then would the government please clarify exactly what is meant by slavery or servitude?

Surprisingly, despite there being a huge department for collection of various taxes and duties, the major portion of revenue target achieved during a fiscal year is dependent upon the efforts of withholding agents. Instead of performing the duty of collecting taxes themselves, the revenue officers are largely engaged in overseeing the work of these agents -- as if they were their employees (or slaves?). Employees of the government earn salaries, but what do slaves get in return? Nothing: only punishment and fear of prosecution even for an inadvertent and small lapse.

It is a pity how an employee of, say the income tax department, can make the life of a withholding agent extremely miserable by his or her arrogance and attitude. There are many instances where withholding agents have been tormented by the presence of such people on their business premises on the pretext of audit and/or examination of accounts related to withholding. All these things could be tolerated if the government was generous enough to compensate these agents by allowing them a cut in the taxes collected by them. This way there would hardly be any grievance.

On the contrary, these agents would perform even better without being threatened of dire consequences. Keeping the corporate psyche in mind, a sensible legislation would greatly enhance revenue collection and reduce the burden of expenses on the withholding agents, guaranteeing a more amiable private-public relationship while upholding the tenets of both the 1973 Constitution and the Universal Declaration of Human Rights.

Courtesy: The News Pakistan