“Taxes are the price we pay for civilization,” said legendry American Supreme Court Justice Oliver Wendell Holmes. Indeed, the ideal of the creation of a civilized and developed society cannot be materialized without an effective and efficient system of taxation. Today, if the citizens in the West are enjoying civic rights and better living standards it is only because of the fact that there exists a healthy tax culture. It requires each citizen to contribute his due share to the system honestly and diligently. There are some Scandinavian countries where the tax-to-GDP ratio is more than 50%.

As a nation, we have failed to evolve or otherwise promote any healthy tax culture in Pakistan so far. Besides certain tax exemptions, there is a general tendency to evade tax. Both the governors and the governed seem equally interested and obsessed with the idea of creating a sort of ‘tax-free society.’ Pakistan has one of the lowest tax-to-GDP ratios in the world as only 0.9% of its population pays income tax. As the ‘big fish’ always mange to escape the ‘tax net,’ only ‘toddlers’ are often selectively and mercilessly hooked by the skilful economic anglers in our country. It is generally believed that a particular culture is instrumental in giving rise to a particular civilization. Therefore, a poor tax culture can by no means be the basis of a rich civilization.


Lahore, January 22.