BY

Muhammad Farooq Textile Mills is a well known name belonging to firebrand industrialist Farooq Sumar, the man the Haqiqis love to hate. It was in this factory that armed intruders stealthily entered its premises, walked casually towards the Cashier’s office, menacingly demanded the wage sack, and quietly walked away with more than 4.3 million rupees. Though this was the largest heist in memory, it was not unusual because a big concern like this will, undoubtedly, have a huge amount on payday.

The desperadoes are attacking business and industrial establishments with impunity and without fear of attack from either the businessmen or their so-called security staff. In fact, in the manner the banks in Midwest USA were for Jesse James or Bonnie and Clyde, the banks here are also easy targets for the local dacoits.

Today, apart from the daily gruesome details of citizens killed, the newspapers are also filled with stories of houses and businesses burglarized, and at times, news of the murder of someone foolish enough to counter the dacoits.

The reason why so much money is being snatched is because of the prevalent system of dealing mostly in paper money. That is why there is so much moolah floating around when there is a modern banking system, and where there are channels of using other mediums rather than cash. One plausible reason is also the archaic, asinine, and absurd taxation system in this country. The cruel and unjust tax policies are responsible for all the cash moving around, marked for burglars, kidnappers, dacoits and so on and so forth.

The taxation system, the inbred hatred for the very word "tax", and the businessmen’s psyche, are all directly related to the excessive and blatant usage of cash as the acceptable mode. It is due to the draconian income tax laws that people prefer cash to checks. They prefer a plain chit to a printed invoice. In fact, the present taxation system is the biggest deterrent to the introduction of documentation in the economy, notwithstanding the earnest desires of the Makhdoom of Finance.

It is a sad fact that in majority of trades and markets, there is no proper and official documentation system. Sales and purchases are conducted orally or in codes. Payments are invariably made thru physical movement of cash. This has resulted in a massive oscillation of money from one point to another. Most of the car showrooms, real estate agents, wholesalers, etc, have a large amount of cash with them at any given time and are sitting ducks for the criminals. Anyone wanting to buy a new car plunks six to seven hundred thousand on the table, and drives out with brand new wheels. It’s another matter that both the car and the money can be victims of criminals lurking out on the roads.

The dependence and preference for cash, the "unofficial" status of that particular financial amount, and the inflow of tainted money from sources such as graft, smuggling, gambling, precludes any notion of utilizing the official banking channels to protect the money.

There is also lot of movement of cash in the industrial sector. This is in the form of payment of wages and salaries, payment for goods supplied, and accounts receivable. The age-old process of paying personnel with cash is a major source of concern and entails a large outlay, as was the case with Sumar’s factory. Workers do not have bank accounts and at the same time are averse to the idea of getting a check instead of crisp bills. Company cashiers are thus prey to hold-ups on way from the bank to the mills. It is no wonder that dacoities are rife in the industrial area. A few months ago, the Chairman of SITE Association while welcoming President Leghari in SITE, specifically mentioned the robbery held just the day before at a leading silk mills which also resulted in a loss of life. The industrialists are very perturbed and are reluctant to even lodge FIRs, more so because of the complacent, lethargic, and alleged "involvement" of the police. This is tragic but, nevertheless, true.

The SITE Association has always advocated the systematic and mandatory introduction of documentation in business activities. It has strongly called for issuance of receipts and invoices as a rule. It has demanded the compulsory usage of bank checks for transactions involving amounts in excess of Rs 10,000. It has forcefully conveyed to CBR the imperative need for rationalization of the tax rate which is extremely on the high side and should not be more than 20%. This will usher in an era of legitimate accounting, proper maintaining of records, and less dependence of cash transactions.

There is then this need for the budget planners and the economic wizards to prepare pragmatic plans based on the actual requirements of the country. If the government is keen to minimize, if not completely eradicate, the utilization of two sets of account ledgers or to lessen the influence of the parallel economy, it has to take the business community into confidence and decide on the essentials of the documentation of the economy. In the short run there will be lot of carping and whining from all businessmen’s platforms. However, in the longer period, it will prove to be of monumental benefit to the concerned community. In fact this is lot better than a situation where dacoits may kidnap a businessman, tie a bomb to his leg, whisk him to a bank, get him to write a large check, and force him to encash it right there. And, on top of it, there wont be unnecessary murders or large heists a la MFTM.

There is then this desire that the FPCCI, KCCI, SITE etc stress for fundamental changes in the medieval taxation system which thru its intimidatory provisions has harassed the business community for decades. Its severe measures have been the cause for so many pathetic situations. It is high time these squalid rules are deposited into a garbage bin where they so rightfully belong, and a new, fresh order is allowed to emerge. A kinder, gentler taxation system will provide the impetus to adapt non-cash modes of transactions. The much abused business community demands this from the democratically and popularly elected government of Benazir Bhutto Saheba.