Implementing a flat-rate tax
For too long, we have allowed Pakistan's tax codes to wreak havoc on our state's finances – revenue shortfalls lead to excessive borrowing, cuts in essential services, enormously inefficient disruptions in long-term projects and tax increases that only exacerbate the crisis. These crises are exceptionally deep and lasting, directly resulting from Pakistan having the worst tax system in the region. The time has come to consider a flat-rate tax on personal income, general sales tax (GST), corporate income and customs and excise duties. Revenue forecasts made by the finance ministry each year are far off the mark and consistently illustrate the state's fiscal malaise. This issue, more than anything else, is the root cause of our current fiscal crisis. Today, Pakistan's tax structure is characterised by top marginal tax rates among the highest in the region in nearly every tax category, applied to a small tax base. Every opportunity to reform Pakistan's tax system goes unheeded, and the state once again reaches a fiscal crisis, teetering on the brink of a serious slowdown.