Pakistan’s current tax-to-GDP ratio is among the lowest in the world. This is one of the major reasons the country ends up in huge fiscal deficits every year. Successive governments have also failed to broaden the country’s tax base. The current tax regime unfairly burdens the middle class and exempts the powerful from paying their due share. In fact, the powerful evade taxes with impunity and manipulate the system to their advantage.
Moreover, the current account deficit and fiscal deficit, along with debit servicing, are putting unbearable pressure on the economy. These, in turn, compel the government to cut costs on human development, social welfare and economic infrastructure. The only victim of such measures is the regular citizen. There is a dire need for robust reforms that can ameliorate the sufferings of the poor. The ruling party promised that it would establish a welfare state with a just society. Although it has failed to fulfil its promises in the last three years, all is not yet lost. As Shaukat Tarin has appointed the federal minister for finance, it is hoped that he will walk the talk and bring some reforms to the tax system in the remaining two years.
A K Meo
Kasur
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