Govt needs to improve tax-GDP ratio: Expert

Tax to GDP ratio in Pakistan around 10% in 2009 as compared to an average of 20% in other developing countries.

ISLAMABAD:

The low tax to GDP ratio has resulted in a weak Pakistan that needs to rely on foreign assistance.

This was stated by Dr Tariq Banuri, founding executive director of Sustainable Development and Policy Institute (SDPI), at the
20th anniversary celebrations of the SDPI on Saturday. Dr Banuri is currently the Director of the Division for Sustainable Development
at the United Nations in New York.

He said that tax to Gross Domestic Product (GDP) ratio in Pakistan is around 10% in 2009 as compared to an average of 20% in other developing countries and 30-40% in developed countries.

He said that provincial share in tax collection is less than 1.5%. In contrast the share of provinces in tax collection in India is 5%.

Dr Banuri also discussed the concept of the “circle of justice”, arguing that prosperity cannot be achieved unless justice is ensured, which itself depends on a strong state.

Published in The Express Tribune, February 12^th, 2012.