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The mainstay of current tax reform discussions in Pakistan arrives at the unanimous conclusion that the tax system is deeply flawed and cannot continue the way that it has. The most prominent and à propos recommendations include an expansion of the tax base, a reduction of unfair burden on the salaried class, and the taxation of vested interest groups that have avoided paying their share for a very long period of time. These are found in economists’ consensus, public opinion and sympathy, and are also IMF recommendations, particularly from its head Kristina Georgieva. While these policy approaches are certainly well-deserved and the need of the hour, I am surprised by the lack of focus on the expenditure-side: what are we spending the money  on? It is in fact the expenditure-side that needs to be drastically curtailed, especially in the provision of non-productive privileges and emoluments, as well in the reconciliation of government size at both the federal and provincial levels.

But if one puts aside the expenditure question, and takes the tax question (the revenue-side) as priority, it actually helps a great deal to observe how taxation worked in the Subcontinent in earlier periods of history. This helps to shed light on how easy we have had it since 1947, and how spoiled certain segments have been in the modern era as opposed to in the “good old days.” In that regard, the Mughal Empire is particularly instructive because we have a sense of continuity with that cultural ethos in spite of the rupture caused by British colonialism. In particular, the role of the Subhedars (Governors) is remarkably and delightfully informative.

The Subhedars were tasked by the Mughal Emperor to govern as his agents over the various imperial dominions, and they enjoyed a great deal of power and flexibility to execute their administrative functions. One of the core priorities of the Subhedars, along with the Mansabdars (rank holders), was to execute an effective fiscal function. This meant revenue collection from the land, from customs, from Jizya, and from various other sources. Some of this would be kept for provincial use, while some would be diverted towards the central fiscal system of the Mughal seat.

There were at least two elements of that system which were very different from the tax setup we have today, and both were extremely important to sound fiscal management. This first point was that the means of extracting taxes were forceful and non-negotiable. The Subhedars made sure that taxes were collected from all liable payers, no matter what. The second point was that enough tax-equivalent surplus of resources (e.g. grain) was kept for deployment in adverse situations, meaning that the fiscal system had enough surplus to be used for a rainy day. Therefore, with tough enforcement and with forward-looking planning, the Mughals could execute sound public administration in the fiscal sense.

The question of tough enforcement, almost without exception, is one that seems alien to the prevalent half-baked  practices we see today. Do you think you could get away from the sword of the Subhedar when it came to tax collection? Various accounts describe “tax collection with an iron rod” as the Subhedar’s policy. In fact, one case study puts it in perspective, that of Murshid Quli Khan, Subhedar of Bengal, who was:

“notorious for the harshness of his tax-collecting regime. Defaulters among the local gentry would be summoned to Murshidabad, and there confined without food and drink. In winter, the Governor would order them to be stripped naked and doused with cold water, then suspend them by the heels, and bastinado (beat) them with a switch throw them into a pit filled with human excrement in such a state of putrefaction as to be full of worms, and the stench was so offensive, (and) oblige them to wear long leather drawers, filled with live cats.” (Salimullah, 1788).

Well, this is one way to deal with tax evaders. Perhaps some of the more draconian elements of that time may be omitted on humane grounds. But the spirit of tough enforcement on tax avoiding interest groups should not be very different. At CASS we have done considerable work on tax policy, and we argue for a tax system that is in-line with international best practices, i.e. one that is: fair, neutral, effective, efficient, certain, neutral, and flexible. What we have is none of the above. Therefore, the pressure is on a very narrow base of taxpayers to shoulder the weight of the entire country, which is untenable. 

The second strength of the Mughal system was that it was prepared for a rainy day. Taxed-equivalent surpluses would be kept of key commodities (e.g. grain) to be distributed by Subhedars in the event of some calamity such as floods, earthquakes, or droughts. This is not to say that a lot of the tax revenue wasn’t used for pomp and luxury. After all, the world remembers the Mughals much more for their grandiose monuments than for their welfare programs or fiscal policies. But enough was kept for disaster preparedness, and the surpluses were recycled in a manner that brought balance among the most productive provinces (e.g. Bengal, Oudh, Bihar) and the least productive ones (Rajputana, Bhopal etc). In other words, the redistributive and disaster-proofed nature of the fiscal system was also very good, and very different from what we have today.

Although the Subhedar/Mansabdars model is a strong case in point, various other regional dynasties of the Subcontinent were also very adamant on tax collection. This means that tough tax policy has been more of a historical norm than an exception. Instead, we are the ones living in the exception, and it is not sustainable. Even after the Mughals, such toughness did not vanish. In fact, the British did not innovate a different system from that of the Mughals, but rather took over the Persian administrative systems that the Mughals used, which was a clever thing to do since there was a great deal of indigenous adaptation embedded into these systems. Today’s tax policies and practices, however, do not reflect indigenous thinking, and in fact do not reflect sufficient thinking at all but rather an adhocratic approach run amok.

I am still of the view that the focus must be on the expenditure-side rather than the revenue-side. But insofar as reforms are required on the revenue-side, we would be adroit in examining the success of historical models deployed in our geographical-cultural matrix. There’s no need to put cats in peoples’ jackets, nor of proceeding Bazor-e-Shamsheer (“by the sword”), but there is something to be said for the Subhedar’s way of taking taxation seriously. It is only then that we will realize how tax collection was not a problem in the past, and only a modern, temporary affliction.

Further reading:

  1. Grapperhaus, F. (1998). Taxation in the Empire of the Great Moghuls. In Tax Tales from the Second Millennium, 109–158. Amsterdam: International Bureau of Fiscal Documentation (IBFD).
  2. Mujtaba, H, & Chohan, U.W. (2022). Pakistan’s Taxation Conundrum. Centre for Aerospace and Security Studies (CASS). Available at: 
  3. Salimullah. (1788). A Narrative of the Transactions in Bengal: During the Soobahdaries of Azeemus-Shan, Jaffar Khan, Shuja Khan, Sirafraz Khan and Alyvardy Khan. Translated by Gladwin F. Calcutta: Press of Stuart & Cooper.
  4. Shome, P. (2021). Taxation history, theory, law and administration. Springer.

Dr. Usman W. Chohan is Advisor (Economic Affairs and National Development) at the Centre for Aerospace & Security Studies, Islamabad, Pakistan. He can be reached at  

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