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What structural factor historically compresses Pakistan's tax-to-GDP ratio, according to economic evaluations by the FBR?
medium
Large undocumented informal sectors and pervasive narrow tax bases with extensive sectoral exemptions
A constitutional ban on collecting direct income taxes from industrial manufacturing corporate groups
The mandatory allocation of all collected customs duties directly to international trade organizations
Excessive reliance on automated direct transaction taxes that discourage consumer market liquidity
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Explanation
Pakistan's low tax-to-GDP ratio stems from structural challenges: an expansive parallel undocumented economy, small numbers of active filers, and historic tax holiday/exemption provisions across real estate and agriculture sectors.…
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Concept Behind This Question
This question focuses on the concept of Tax-to-GDP Ratio Causes under the broader topic of Economy.
Related key concepts: Tax-to-GDP, Informal-Economy.
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Question Details
- Subject:
- Pakistan Affairs
- Topic:
- Economy
- Subtopic:
- Tax-to-GDP Ratio Causes
- Difficulty:
- medium
- Source:
- Original
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