KARACHI, Pakistan — In one of Karachi’s most posh neighborhoods, only half of the 500,000 residents paid their property, maintenance and water taxes last year.
As a result, the Clifton Cantonment board, like Pakistan itself, is in serious financial trouble.
As my colleague Sabrina Tavernise reports, nationwide, fewer than a million out of 170 million Pakistanis voluntarily filed income tax returns last year. The rate is among the lowest in the world.
In a bid for a solution — and some publicity — the Clifton board borrowed a creative idea that alleviated tax woes in neighboring India: It hired a team of transgendered tax collectors to go door to door to embarrass the rich until they pay.
Transgendered people, known as TGs in Pakistan, carry a social stigma in the country, and their presence rattles the rich. For many of the TGs hired by the Clifton board, tax collecting is their first salaried job, and two of them still work as sex workers.
“Neighbors will come out and say, ‘Oh, what’s happening?’ and the bad name the person will get, this will maybe convince them to pay taxes,” said Aziz Suharwardy, the board’s vice president. “And that’s exactly what happens.”
The TGs have collected $100,000 in about nine months, 10 times the cost of the program. Still, the TG’s collection barely puts a dent in the board’s $5 million tax revenue shortfall.
Two years ago, the Clifton board hired a consultant to employ a more automated system that prevents collectors from pocketing the money they receive. But the employees resisted the computerized system because “their discretion was removed, and discretion is all about money,” said Mr. Suharwardy. He said corruption continued to plague Clifton’s efforts to retrieve taxes.
In a sign of the power of Pakistan’s V.I.P. culture, one collector told me that the TG team recently approached the house of an unknown defaulter. They quickly learned that it was the home of the provincial minister of excise and taxation. The team promptly left without creating its usual spectacle to shame the delinquent taxpayer.