“At midday dozens of protesters who’d been waiting quietly inside the store stood up, unfurled their banners and leaflets and began chanting: “Starbucks – pay your taxes! Starbucks sucks money from the UK! Boycott Starbucks – tell your friends!” Star bucks is the second largest Company of UK after McDonalds in terms of earnings. Recently, its UK based operations reported no profit no loss henceforth paying 0 pound as Tax. This evasion was eventually pointed out by the government causing an outrage amongst the citizens and a threatening statement by UK premier David Cameron who told the World Economic Forum in Davos last week that tax-avoiding companies should “wake up and smell the coffee.” Resultantly ,Starbucks has threatened to cut its investment in the country.
This interesting scenario reminds me that Pakistan has one of the lowest tax-to-GDP ratios in the world, estimated at 9.2%. Only 260,000 out of 180 million citizens have paid tax consecutively for the last three years, according to the Federal Board of Revenues (FBR). These 260,000 s major chunk most probably is the salaried class. The small businesses and shops do not keep any GST stamped bills thus avoiding the documentation of the transactions. The international Companies however, conveniently pass the tax burden in indirect terms to its hapless consumers. Most Consumer being clueless that under the Consumer Protection laws applicable in Pakistan, they are very much eligible to ask for the printed authentic bills and launch a complaint with the Consumer Court. However, the commendable speed of the lower court justice bars even most knowledgeable citizens from filing Complaints. The matter has probably been left to Suo Moto of the honorable Supreme Court. However, leaving aside the major businesses( who are tax evaders by default), the small local business is as much a culprit for evading the tax as is the big business or any politician. Small cafes, shops, ice cream parlors, beauty parlors, khokhas etc do not pay tax at all most of the times. This section of the invisible Tax evader like your next door “Jadee Pan Wala” is the cause of your inherited tax evasion as much as Star Bucks is for the Uk Citizen.