Pakistan Faces Tax Imbalance Issues: Kamran Khan
Kamran Khan says Pakistan's tax burden is falling more on salaried people and documented businesses while the informal economy stays mostly untaxed.
Intelligence analysis by GPT-5.4 Mini
The report says Pakistan's tax system is increasingly leaning on a narrow base, especially salaried taxpayers and documented firms. It argues that weak revenue collection, indirect levies, and a complex filing system are deepening pressure instead of widening compliance.
Pakistan's tax system is like a school lunch bill that only a few students keep paying. The report says honest payers are being asked to cover more, while many others still do not pay their share.
Analysis
What the report says
Kamran Khan argues that Pakistan's tax system is becoming more imbalanced: people who already file and pay, especially salaried employees and documented businesses, are carrying a growing share of the burden while much of the informal economy remains outside the net.
He says this is happening at a time when the economy is weak and growth is slow, which raises a key question ahead of the budget: will the government give any real relief to honest taxpayers, or add even more pressure to them?
Structural problems
The report points to several weaknesses. First, Pakistan is relying on a narrow tax base, which means the same compliant group keeps being squeezed. Second, the filing process is described as too long and too complicated, which discourages wider participation. Third, the Federal Board of Revenue has revised revenue targets multiple times, but collection gaps still remain, suggesting the problem is not just a temporary shortfall.
The report also highlights growing dependence on petroleum-related levies. That matters because indirect taxes on fuel are ultimately passed on to ordinary people and businesses through higher costs.
Export and budget pressure
Another issue raised is stuck refunds for exporters, which can reduce cash flow and limit investment capacity in the export sector. The report says this kind of pressure can hurt business activity even if the government gets short-term revenue.
The suggested fix is broad reform: simplify tax returns, lower rates, and bring more of the informal economy into the system. The warning is that if the budget focuses only on quick revenue gains, it may ease the fiscal picture temporarily but fail to support growth, jobs, and investment.
Key points
- Kamran Khan says salaried people and documented businesses are bearing too much of Pakistan's tax burden.
- The informal economy is still largely outside the tax net, keeping the base narrow.
- The report says Pakistan's tax filing system is too complex and discourages compliance.
- Revenue targets have been revised repeatedly, but collection gaps continue to persist.
- Heavy reliance on petroleum-related levies is adding indirect costs for citizens and businesses.
If the government follows the report's advice, simpler tax forms and broader enforcement could bring more people into the system. That could ease pressure on salaried workers and documented businesses while making revenue collection fairer.
If the budget again leans on the same compliant taxpayers, their burden could keep rising without fixing the underlying gap. Continued dependence on fuel-related levies and stuck exporter refunds could also raise costs and slow investment.
