Popular opinion shaped by mainstream media unknowingly often gives the impression that Pakistan’s tax revenue growth is stagnant. That is, however, not the case.
In the last 5 years, Pakistan’s tax revenue has nearly doubled, while the Tax-to-GDP ratio has also gradually improved. While in 2011, the Tax-to-GDP ratio stood at 8.5%, in 2019’s provisional collections, it stood at 11.6%. Although, this is low in comparison to the regional average of 15%, the consistent growth implies that there is no stagnation.
It is also worth noting that the growth has been consistent in both Direct and Indirect Tax revenues, where, on average, they constitute 40% and 60%, respectively, of the total revenue