Pakistan’s fiscal policy—marked by oppressive taxes and negligible welfare—has amplified economic strains across society. Every regime, be it uniformed or elected, has piled on regressive levies, triggering inflation that ravages households while ignoring the poor’s plight, according to incisive local commentary.
The Friday Times from Lahore calls this crisis a symptom of a frayed citizen-state bond. Taxes pour in, but welfare outflows are negligible, breeding cynicism, repelling capital, and contracting formal sectors. This lopsided approach dooms revenue goals.
Myths of low productivity or innovation deficits obscure the truth: a cost structure that inflates business expenses by 34% over South Asian norms, as per Nikkei Asia and PBF data. These aren’t cyclical; they’re baked into policy, accumulating destructively.
A pitiful 3.4 million taxpayers (4% of workforce) bankroll everything, hammering the middle class while elites in shadows prosper. Tax merits punishment; evasion, prosperity. Low yields persist via narrow high-rate bases, 5 lakh crore exemptions, and frantic patches like super taxes—debt-to-revenue still soars past 700%.
The path forward demands tax base broadening, exemption purges, welfare ramp-ups, and trust restoration. Absent these, Pakistan’s economy languishes in inefficiency, disparity, and despair.