#css #css2024 #currentaffairs #css2025 #pms #pms2024 #currentaffairs2024 #worldinfocus #taxes #tax #budget2024 #budget #pakistanaffairs #pakistan #economyofpakistan #economiccrisis #health #education
Taxation problems:
• Introduction:
• Background:
The tax-to-GDP ratio continues to hover around 10% of the GDP. The inability to expand tax revenue contributes to significant public service delivery gaps: over 20 million people live without clean water, almost one in every three people do not have a decent toilet, and about 40% children under the age of five have stunted growth.
• What are the major Challenges` to taxation problems in Pakistan?
o Under-taxation
 Agriculture, retailers and real estate with a population of over 100 million, all of the state of Punjab in Pakistan collects less urban property tax than the city of Chennai in India, which is home to about 10 million people. The agriculture sector is also undertaxed: while agriculture contributes to nearly one-fifth of the GDP, it counts for less than 1% of national tax revenue.
o Higher taxation:
 levying extensive taxes on imports, Pakistani firms are more incentivised to sell domestically to a protected market than to compete globally. Research by the World Bank shows that a 10% import duty in Pakistan increases profits from selling domestically relative to exporting by 40% on average. This feeds into Pakistan’s structural challenge of low exports which are the core of its recurring balance of payment crises.
o Tax Exemptions:
 range of exemptions that cost the country over PKR 1.7 trillion in forgone tax revenue in the past year alone
o Institutional Problems
o Lack of Political Will
o Cultural Problems
• Impacts:
o Economic Imbalance
o Reliance on Foreign and Domestic Loans
o Social Problems
o Weak Security
o Corruption
o Poor infrastructure etc.
• Way Forward
• Conclusion