the extent that West Pakistan-produced goods are sold in East Pakistan, East Pakistani consumers pay the excise duty even though collections are recorded in the West wing. For example in 1968-69 one-fifth of Excise duty collected in West Pakistan came from cotton fabrics and yarn. This is also West Pakistan's biggest export to the East wing. It follows that a part of this collection should be accredited to the East wing. The same applies to collections for other products sold in the East wing.
However even allowing for this at least two-thirds of revenues are collected in the West wing. But this merely proves that West Pakistan has been privilege to have a higher level and faster rate of industrialization. Nearly all excise collections are realized from the Large Scale Manufacturing sector. In 1968-69, 74% of value added by this sector accrued in the West wing. It is, therefore, hardly surprising if 73.2% of excise collections come from there. If the share of industry East Pakistan has always demanded was located here its collections would have been correspondingly higher.
Direct Taxes
These refer to taxes on income and wealth of corporations and individuals. Here East Pakistan's contribution of 15.7% is the lowest of all tax heads. And who should be surprised. Collections here reflect the geographical concentrations of companies and wealthy people. Less than 1 % of the population pays income tax. A large proportion of them are concentrated in the West wing. Most companies are located there and even those who do most of their business in East Pakistan have their head offices in the West wing and pay their taxes there. In 1968-69, out of Rs. 23.2 crores of corporation tax paid only by companies, only Rs. 2.98 crores or 12.8% was realized in East Pakistan.
Again this concentration of the wealthy in West Pakistan is a symptom of the faster development of the region and hardly a cause. Public policies have manufactured our affluent classes in the West and it is this very policy with its class and regional bias which is under attack.
Sales Tax
Here 27.2 % of collections are in the East wing. Of this about 54% (1968-69 figures) are realized from imports, so that their regional distribution is determined, as in the case of Customs duties, by the distribution of imports between the two regions.
The balance of 46 % is realized from items of domestic manufacture and consumption. As with Excise, concentration of manufactures in West yields more Sales Tax. Similarly concentration of income in the West produces higher sales and hence more Sales tax. Here again some of the taxes collected in the West are paid by East wing consumers.
It is, therefore, apparent to the most modest intelligence that the two regions revenue collections bear a close relation to their development. Disparity in development produces
