New Delhi, Feb 7 Suffering from a profound identity crisis, Pakistan has thrown tax burden onto a population that receives the public services of a medieval fiefdom, according to a new report.
A report in Business Recorder reveals that Pakistan’s fiscal policy remains obsessed with squeezing the productive few to fund a “bloated, unproductive bureaucracy”.
“We are not a welfare state; we lack the institutional nervous system, the documentation, and the moral contract to sustain one,” it adds.
According to the report, the country has only 3.4 million effective taxpayers — a mere 4 per cent of the 85.6 million-strong workforce funding the entire state.
“Having forced this captive minority to bridge a multi-trillion rupee deficit while the informal elite remain untouched, we have classified excellence as a taxable offence and transparency as a path to insolvency,” the report laments.
When a salaried professional is taxed at 35% but must still pay out-of-pocket for private security, power, and education, the government is effectively charging a luxury premium for a social contract it has already breached.
"The outcome of that is already seen in the form of 800,000 skilled architects of our future economy leaving Pakistan by 2025 who had no choice but to either be crushed under our current policies or go into exile,” according to the report.
However, the IMF and state technocrats argue that the fiscal deficit leaves us no choice.
They argue that with debt-servicing requirements nearing Rs 9 trillion, the state must extract every possible rupee from the documented sector.
“This logic is fundamentally flawed. You do not foster a forest by chopping the only trees that manage to grow,” says the report.
High rates on a microscopic base are the cause of our stagnation, not the cure, it says, adding that by maintaining such high rates, the state ensures the “shadow economy” remains in the shadows.
True fiscal solvency is a product of volume and trust, not the velocity of extraction, according to the report.
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