Curbing tax evasion

Published November 18, 2021

TAX evasion is adding insult to injury when it comes to the country’s economic crisis. Merely 2.5 million or 35 per cent of the 72pc total registered taxpayers have filed their returns for tax year 2021. This is a very low rate of compliance with the tax laws.

Ironically, instead of pressing harder for direct taxes, the government is choosing the easier path of expanding and increasing indirect levies, which spare the wealthy and directly burden the ordinary folks. This is because of its reluctance to reform the system for widening the tax-base, especially in the income tax regime.

Pakistan’s tax-to-GDP ratio, around 10pc, is one of lowest in the region and, indeed, in the world. It is at the heart of the country’s chronic economic and financial woes. Like its predecessors, the government has focussed on indirect taxation without addressing the difficult challenge of expanding the tax-base.

This strategy did not work in the past and will not deliver today or in the future. Hence, the government should focus on widening the proportion of direct taxation for which it should introduce due reforms.

Nazia Abro
Karachi

Published in Dawn, November 18th, 2021

Opinion

Editorial

Mosquito season
10 Mar, 2025

Mosquito season

AS temperatures rise, the threat of dengue looms large over Pakistan. Its warning signs have already arrived. Dengue...
Reckless rhetoric
10 Mar, 2025

Reckless rhetoric

ONCE again, the Indian leadership gave in to their worst impulses, with External Affairs Minister S. Jaishankar...
Water scarcity
Updated 10 Mar, 2025

Water scarcity

The need to meet climate challenge is even greater when Pakistan is prone to multiple disastrous events at the same time.
Banning groups
Updated 09 Mar, 2025

Banning groups

The state’s approach of banning groups, and then letting them operate with new monikers, must be revisited.
Targeting students
09 Mar, 2025

Targeting students

THE Trump administration’s mission to ‘Make America Great Again’ is well underway, and, in true Trumpian ...
Torkham dispute
09 Mar, 2025

Torkham dispute

THE Torkham crossing between Pakistan and Afghanistan has remained closed for two weeks, after a dispute over border...