Re-imagining the Tax Mechanism in Pakistan

The present income tax mechanism in Pakistan is based on an opt-in strategy. An individual has to first go through a cumbersome registration process with the FBR and then only can they file their income tax return. Such a mechanism would be a hard sell even in a developed country where a significant portion of the economy is documented. To make it work effectively in Pakistan is a Herculean task. Despite repeated attempts to expand the tax nett, the numbers remain paltry and do not inspire much confidence in the existing setup. It is time to re-think the income tax mechanism, co-opt the family structure into how returns are filed, and bring statistical techniques to bear on the issue of tax avoidance.

Published in Express Tribune, August 2019. Joint with Humza Jami.


Checking Out: What’s in Pakistan’s Import Cart?

Every time the rupee loses value against the dollar, two opposing schools of thought have a go at each other. Camp Invisible Hand advocates for a market-determined exchange rate arguing that a systematically overvalued rupee favors imports at the expense of exports and domestic industries. The rebuttal from the other side is that an overvalued rupee is vital. The economy depends on petroleum products, sophisticated machinery, and other intermediate goods that need to be imported for local industries to develop. As is the case with most questions in economics, the answer is somewhere in the middle.

Published by Tabadlab, an Islamabad-based think tank, August 2019.

A yawning gap: since the early 2000s, Pakistan's imports and exports have diverged, possibly due to the liberalization policies of 1990s and 2000s. However, since 2010, exports have stagnated while imports have grown unabated. In recent years, the gap between the two has become wider than a sportsperson's yawn.

A yawning gap: since the early 2000s, Pakistan's imports and exports have diverged, possibly due to the liberalization policies of 1990s and 2000s. However, since 2010, exports have stagnated while imports have grown unabated. In recent years, the gap between the two has become wider than a sportsperson's yawn.