: Sunday, February 22, 2026 11:44 PM
New Delhi. Whatever government there has been in the history of Pakistan, be it civil or military, all of them have imposed high and regressive taxes. The result was that most of the population here had to face the brunt of inflation. Besides, the government does not provide anything in the name of welfare. The government is completely indifferent towards the economically weaker sections of the society. This has been said in an article published in Pakistani media. According to The Friday Times, published from Lahore, Pakistan’s fiscal crisis is not just an issue of deficit and figures, but is a sign of a broken social contract. There is a widening gap between what citizens give and what they get. High taxation without welfare delivery has not only failed to generate effective revenues, it has also eroded confidence, discouraged investment and weakened the formal economy. The report said Pakistan’s development failure has often been explained by arguments such as low productivity, weak exports, lack of innovation or inadequate entrepreneurship. But, the real problem lies in the cost structure created by the government, which has made doing business very expensive and structurally uneconomical.
The article cites a recent private sector analysis published in Nikkei Asia, which states that doing business in Pakistan is 34 percent more expensive than in other South Asian economies. According to the study conducted by Pakistan Business Forum (PBF), the additional costs are not accidental or cyclical, but arise due to structural, cumulative and policy reasons.
The article said, ‘The entire state is being financed by only 34 lakh effective taxpayers, which is just four percent of the workforce of 8.56 crore. We have declared war against the middle class. When this limited class is forced to bridge multi-trillion rupee losses while the informal elite remain untouched, excellence is made a taxable offense and transparency a path to bankruptcy.’
The article states that the tragedy is not that Pakistan collects very little tax, but that it taxes in a haphazard manner. With high rates on a narrow tax base, low receipts and tax expenditure of about Rs five lakh crore, the debt-to-tax ratio remains over 700 per cent despite successive mini-budgets, super taxes, cess on petroleum, stringent tax deduction at source provisions and expansion of presumptive taxation.
—
Read this also – Click to read the news of your state/city before the newspaper.
Web Title-Pakistan’s high taxes and weak welfare system exacerbate economic pressures.
