The federal budget 2026-27 has once again reignited debate over Pakistan’s taxation system. Pakistan’s tax-to-GDP ratio remains low compared to other developing economies, primarily due to a large undocumented sector. As a result, salaried individuals and registered businesses continue to bear a disproportionate share of the tax burden. Despite being among the most compliant taxpayers, salaried individuals have received limited direct relief in the latest budget, even as inflation and rising utility costs continue to reduce their real incomes. A sustainable fiscal framework cannot rely repeatedly on the same documented segment. Broadening the tax base through effective documentation, digital monitoring and enforcement across untaxed sectors is essential for achieving both revenue targets and economic fairness.
Areeba Tehreem
Lahore
