Press Release
IMF Prepares Pakistan's Budget
Abolish Democracy, Establish Khilafah to Restore Economic Sovereignty

Regardless of the changes of faces on 11 May 2013, democracy will ensure that our budget is made by the colonialists. During its April 17-22 visit to the United States, a six-member delegation, including the secretaries for finance and economic affairs, the SBP governor, additional secretary for external finance and chairman of the Federal Board of Revenue, will take orders from the International Monetary Fund (IMF) and key officials of the US treasury department about our budget. Then as has happened every year, whether under democracy or dictatorship, a Letter of Intent will be signed and then the American approved Pakistani budget will be unleashed on an already crippled economy, after elections for a change in faces.

Under the supervision of the IMF and its partner in economic destruction, the World Bank; Pakistan has been strangled by huge taxation on earnings and consumption of goods which is constantly being increased as a proportion of the total revenue. In 2011-12, the government extracted Rs. 730,000 million in income taxes alone, which is more than the entire revenue collected in 2002-3.This has meant that the labour force, blue and white collar workers are facing ever greater hardships, with increased taxation eating away at their wages. Moreover, in the 2012-13 budgets, the government is now chasing a target of a staggering Rs. 914,000 million. Consider also sales tax that has swollen from 9% to 43% of the state's major taxes. It is this sales tax that has made buying medicine, food, inputs for agriculture and industry unbearable for people, choking their ability to contribute to the economy and secure basic needs. In 2011-12, the government extracted Rs. 852,030 million in general sales taxes and in the 2012-13 budget, the target is Rs. 1,076,500 million.

As long as the democracy system remains, the situation will worsen, no matter who comes to power. Democracy can only produce such failure as it is designed to neglect the affairs of the people and this is why all those who seek power in this rotten system are also calling for increased taxation in their manifestos.

Hizb ut Tahrir's campaign is far more substantial than just a simple boycott of elections for democratic leaders, as misreported in the press. Hizb ut Tahrir's campaign is to abolish democracy and establish the Khilafah "Caliphate" under the leadership of its Ameer, the distinguished jurist and politician, Sheikh Ata Ibnu Khalil Abu Arrashtah. Only under the Khilafah "Caliphate" will elected rulers and representatives have any real meaning.

And only under the Khilafah "Caliphate" will economic sovereignty be restored. Islam does not rely on taxation on income and consumption as virtually the sole means to generate revenue. Its revenue generation is based on accrued wealth beyond the basic needs or upon actual production. Even when the Khilafah "Caliphate" does tax, it is with stringent conditions that are based upon accumulated wealth, so it does not penalize the poor and under-privileged who are unable to secure their basic needs. And this is aside from the huge revenue that the state will generate from state owned and publicly owned enterprises such as energy resources, machinery and infrastructure manufacture. Industry will thrive in the Khilafah "Caliphate". It will not be strangled by taxes for all manner of crucial inputs, from energy to machinery. Instead, the state will generate revenue from profits of the trade and accrued trading merchandise. This allows businesses to focus on production without fetters, whilst circulation is ensured through their giving of revenues from their profits or accrued wealth. In Islam, the taxation is not based on consumption of agricultural inputs, but on production from the land, which enables the farmer to maximize the production, without being slowed down by over-expensive inputs.

So, it is time to abolish democracy and establish the Khilafah "Caliphate", which will restore prosperity and security to this Ummah by its implementation of the Deen of Truth.

The Media Office of Hizb ut Tahrir in Wilayah of Pakistan