The existential threat to Pakistan starts with the letter ‘T’. It’s ‘Taxes’. More precisely, it’s the lack of a fair and equitable taxation system, and the unwillingness and inability of successive governments to fix it.

United States public companies are navigating new reporting and monitoring demands arising from new regulation and societal trends. The Sarbanes-Oxley Act (SOX) and the apparent conversion of US Generally Accepted Accounting Principles (GAAP) to the International Financial Reporting Standards (IFRS) have created reporting issues for US companies.

Even though the Federal Board of Revenue (FBR) appears determined to widen the tax net and is undertaking some unconventional measures as well to rein in the evaders, not much change can be expected from resource mobilisation effort in the year 2012.

The Securities and Exchange Commission of Pakistan (SECP) has decided to streamline investments made by listed companies in associated firms, much of which is made without proper disclosures to the shareholders.

The 1973 Constitution provides for eliminating all forms of exploitation on the basis of, ‘from each according to his ability, to each according to his work.’ Deviating from this fundamental principle, our successive governments have failed to develop a fair taxation system.

The Securities and Exchange Commission of Pakistan (SECP) is on a relaxation spree, amending rules and regulations governing the markets. Almost on a weekly basis, it issues a statement that certain legal requirements have been ‘streamlined’, ‘revised’ or ‘relaxed’, in the ‘interest of the market.’

With a futuristic approach, Islamic banks are now trying to find Shariah-compliant mode for overnight borrowings from the State Bank discount window. The Islamic banking committee of Pakistan Banks Association is fine-tuning a proposal for this purpose to present it to the State Bank.

Financial regulators seem to be in search of their role far beyond the bee-line of notifications and circulars, as there is scarce little that appears to have been done to reform and govern. The banking and corporate regulators have shuffled their feet and shifted their gaze towards the Standing Committee of the Senate on Finance, when called upon to answer difficult questions.

The tax gap — the difference between sum of tax owed and amount of tax paid voluntarily and on time — stands at 79 per cent of the actual tax receipts in Pakistan, according to Federal Board of Revenue chairman Salman Siddique.

One of major contributor for effective monitoring of market trends, to gain competitive edge, innovate and achieve revenue growth, is reliable business analytics. Quality analytics are only possible if the underlying data is complete, accurate and of the best achievable quality.