Pakistan is the 6th most populous country in the world, with over 180 million inhabitants. Its GDP was estimated at 232.3 billion USD in 2013, with an annual growth of 4.4%. The country continues to struggle with relatively high rates of unemployment (6.6%) and inflation.
The tax-to-GDP ratio was around 11.1% in 2013 and 9.5% in 2014. Indirect taxes make up nearly 75% of total revenue collection, of which the poor and middle class carry most of the burden. In 1991 Pakistan’s tax system was changed from a progressive to a regressive regime. As a result, the tax burden on the poor has increased by 17% over the period of 1991-2013, whereas the richest households saw a decline of 25%.
In recent years the poverty rates have dropped from 34.5% in 2001/02 to 12.4% in 2011. An impressive achievement, though this might be hard to sustain.
At about 2% of their GDP, Pakistan is ranked as one of the lowest spenders on education and health in the region. The Net Enrollment Rates in education have been increasing but still lag behind other South Asian countries. Gender disparities persist in education, health and all economic sectors. Pakistan has one of the lowest female labor force participation rates in the region.

CRAFT Country Strategy

The Fair Taxation work by Oxfam and its partners in Pakistan is relatively new and was only connected to the broader work of the CRAFT program in 2014. In general, the Pakistan fair tax efforts have focused on evidence based advocacy/campaigning to influence revenue and expenditure policies, with the overall goals of poverty reduction and ensuring that the public sector generates sufficient revenues through equitable and progressive taxation to deliver essential services to all citizens. The broad objective is to effectively engage with the Government of Pakistan to build a collective, evidence-based, consensus.
A recent success was the work that was done to reform the tax system in a holistic way, with the National Tax Reforms Commission. The Commission agreed to incorporate a number of key in its agenda, along with a framework for collaboration, which was conceptualized by Oxfam. In addition, it has invited Oxfam to serve on the Commission and its two subcommittees. This will give Oxfam a great opportunity to advocate for a pro-poor tax system in Pakistan.

 

Strategy 2015-2018

The pro-rich regime of tax exemptions/SRO's through which a large number of wealthy people remain outside of the tax net is one of the most serious problems in Pakistan. As such, one of the main focus areas of our Pakistan policy advocacy and campaigns will be the phased abolishment of SRO's and the broadening of the tax base. The whole program is based on continuous research and building capacity of the tax justice coalition partners to advocate for tax justice, take a position on critical themes and influence for change. Currently, the tax justice coalition comprises of two lead partners, two business chambers and around 20 small scale CSOs.