Pakistan People's Party (PPP) has been consistently claiming that efforts are afoot against the "historic" 18th Amendment in the Constitution of Pakistan. Its co-chairman, Asif Ali Zardari, in particular argues that this amendment has ensured equal rights for each province-regardless of its size-in order to strengthen all the federating units as well as the federation. Although his argument is not without some plausibility, he has failed to acknowledge the existence of grim reality that stems from its passage. It has, for example (earlier pointed out by BR op-ed writers Ikramul Haq and Huzaima Bukhari), given birth to a dispute with regard to taxation rights between federation and its units, weak administrative structures, lack of political will and apparatuses to enforce devolved subjects/laws, issues of capacity, efficiency, rent-seeking and competitiveness, violation of the rule of law, non-acceptance of the norms of fair play in economic matters coupled with 'reckless' borrowing and 'ruthless' spending amidst dismal tax-to-GDP ratio.

Both the writers have advocated that "It is imperative that right to levy tax on income, including agricultural income, should be given to the Centre. In return, the Centre should hand over sales tax on goods to the provinces. This will help FBR collect income tax as per actual potential and the provinces by levying sales tax on goods in addition to services will generate sufficient funds for their needs. It will also reduce fiscal deficit of the Centre. This is the only way to achieve fiscal stabilisation in Pakistan without disturbing the 18th Amendment." The PTI government as well as all opposition parties are requested to look into this suggestion.

Copyright Business Recorder, 2019