PAKISTAN AND ITS MASSIVE TAX PROBLEM Pakistan has been following the slogan No taxation with representation. Which means we are ready to pay taxes but without declaring the actual amount or assets owned by a person.

Pakistan`s government is borrowing 70% of its spendings from foreign countries. And these countries have openly said no as the people who should pay taxes don`t pay taxes willingly without consequences.

Most of the tax burden is on lower and middle class which accounts to almost 92% of the population of Pakistan with indirect taxes i.e. Sales tax. While upper class who owns 90% of assets of the country either pay Income Tax which is a fraction of government spending requirements or don`t pay at all.

One of the biggest hurdle in collection of taxes are the law makers themselves. Who for their personal benefits have levied taxes on e.g. Agriculture which is estimated to bring $1.2 billion annually to the tax net. Loop holes are left in laws so that rich can hide beneath it while paying no taxes.

Average worth of a law maker is $0.9 million to rich ones at $37 million. Which due to poor implementation of tax audits are not taxed at all.

Conclusion:

Problem of tax collection and broadening the tax base will only be solved if the tax is paid by every individual willfully or forcefully. Rich or poor the tax needs to be paid at all cost. While the government has to show transparency in collection and usage of public taxes. Unless and until taxes are used for proper economic growth transparently rich or poor will keep on evading taxes. Because there is no trust in Government on spend taxes appropriately. It should not be crime to be rich but not paying taxes should be.