No doubt, the government is struggling hard to promote a tax culture among Pakistani citizens and businesses in order to raise revenue and achieve budgetary demands.
It is matter of honour that there was a great ancient philosopher, belonging to the regions of present-day Pakistan, who developed a most comprehensive and successful taxation system almost two thousand years ago.
Kautilya Chanakya was the actual king maker and man behind the successes of the great Hindu ruler, Chandragupta Maurya. The regime is still acknowledged due to the good governance during its time. Chanakya believed that the state must promote the economic welfare and fully regulate economic activities. In this regard, he advised that the king must start his day by getting reports on three most important issues – defence, revenue and expenditures.
“Kosha Moolo Danda”, Chanakya wrote in first chapter of Arthashastra; this means ‘revenue is the backbone of administration’. This verse in the Devanagari script is also part of the official logo of the income tax department of India. Arthashastra, written in the ancient holy language of Sanskrit, is considered the first ever book on public finance, public administration and fiscal laws in human history. The book widely covers many types of taxes in detail, including general sales tax, defence tax, import and export duties, toll tax, transaction tax, and royalty, etc.
“Just as one plucks fruits from a garden as they ripen, so shall a king have the revenue collected as it becomes due. Just as one does not collect unripe fruits, he shall avoid taking tax that is not due because that will make the people angry and spoil the very sources of revenue,” Chanakya writes in Arthashatra. According to him, tax should be levied once a year, and should not prove burdensome for the public. He insists that taxes should be levied according to the ability to pay.
He further emphasized that taxation should not be a painful process for the people and it is very necessary to ensure leniency and caution while deciding the tax structure. He recommended tax exemptions for the poor, the elderly and the needy. Chanakya was of the view that all achievements are highly dependent on finance. Therefore, serious attention must be paid to increasing the treasury on a priority basis. He believed that a large number of people paying tax on less rate are much better than a few people paying tax on heavy rates. Therefore, he emphasized on a wider range of the tax net.
Chanakya understood that taxation is most important source of income for the state, which is why revenue collection officials must be honest, dedicated and professional. According to him, negligence of duty, ignorance, corruption, arrogance, greed and non-professional attitude are the main reasons behind loss of revenue.
Interestingly, Chanakya defined the rules for foreign trade two thousand years ago. He proposed that import and export duties must be ranged between 4 percent and 20 percent. He also emphasized that international trade should not be like one-way traffic where one country imports so many goods from other countries and results in damaging the local industry. He warned that the national economy would ultimately collapse if the state fails to maintain a balance of imports and exports. He also asked for special facilities for foreigner experts and businesspersons for knowledge sharing and technology transfer.
The basic principle of Chanakya’s taxation doctrine was that the purpose of taxation must be to strengthen government to ensure public welfare and national development. According to him, the public must not be exploited by imposing heavy taxes more than one’s ability to pay. In this regard, Chanakya, in a very smart way, quoted the example of the honey bee, saying that: “Governments should collect taxes like a honeybee, which sucks just the right amount of honey from the flower without causing any harm.”
Chanakya’s teachings are still applicable. Anyone who follows such useful instructions can achieve success. Such great personalities must not be victimised on the basis of religious discrimination and biases.
Today, the current government is struggling tirelessly to enhance the tax net. In this regard, my advice is to follow Chanakya’s tax doctrine. People must consider paying tax as though it were a religious obligation. There is also a dire need to convince people that, unlike past regimes, the money collected will not be used for the luxuries of the ruling elite. The government must also listen to the reservations of the public and the business community. Otherwise, the opposition may succeed in giving the government a tough time on the streets.Dr Ramesh Kumar Vankwani, "Chanakya’s taxation," The news. 2019-07-12.
Keywords: Economics , Tax culture , Economic activities , Tax Department , Human history , National economy , Religious obligations , Business community , Ruling elite , Religious discrimination