Until now, no one has calculated how much tax loss Pakistan has suffered since 1977 on account of non-taxation of agriculture income alone, as suggested under the Finance Act 1977. Through Statutory Regulation Orders (SROs) issued during the last four decades, the figure comes to over Rs. 100 trillion. This demonstrates how unprecedented concessions to the rich have made the state poorer, rendering every citizen of this country severely indebted.
This study builds on the Fair Tax Index Research 2015-16 and reassesses Pakistan’s performance under the six categories of the FTM. In the first phase of monitoring, it was observed that Pakistan has a law in place that addresses all six elements of the methodology and is therefore capable of implementing the methodology in full. However, in this second round of FTM monitoring, it was found that Pakistan lacks the political will through which the law can be implemented. It was concluded that due to lack of political will, the system is rendered ineffective: exemptions and evasion lead to huge losses of taxes paid that could fund public spending, while equity and principles of fairness are compromised in the name of meeting revenue targets.