Pakistan is one of the countries with a lower tax to GDP ratio. Tax collection heavily depends on indirect taxes rather than direct taxes. The regressive tax regime is one of the causes of poverty and inequality in most of the developing countries including Pakistan.
TheNetwork for Consumer protection implemented a project “Tax Justice Campaign” in order to build a case for inculcating tax justice in Pakistan. The overall aim was to ensure that the public sector raises/generates sufficient revenues through equitable and progressive taxation to deliver essential services to all citizens, including the poorest and most vulnerable leading to poverty reduction.
The main focus was on three fiscal challenges which were instrumental in influencing and contributing towards achieving the overall aim.
The three objectives were;
Objective 1; Gradual and phased abolishment of pro-rich regime of Exemptions/SRO’s
Objective 2; broadening the Tax base
Objective 3; ensuring systematic enhancement in sectors percentage the budgetary allocation of available GDP for education, health and social development.
To achieve the objectives, research studies to examine extent of tax exemptions and consequences of indirect taxes on poor, scope for direct taxes and state of essential services were conducted and policy asks were developed.
Secondly, chambers of commerce in major cities like Lahore, Rawalpindi, Islamabad, Sheikupura,
Gujranwala, Faisalabad, Multan, Bahawalpur, Peshawar and Karachi was taken on board to develop consensus to reduce indirect taxes, pro rich tax exemption and increase funds for essential services like health, education and social protection. A joint declaration based on our policy asks was signed between the Tax Justice Campaign and FPCCI.
Thirdly, taxation is considered a complex issue and general public avoids debating on it. To build the capacity of the general public and make tax issue simple series of capacity building workshops were arranged for CSOs and media personals and a national level Coalition “Tax Justice Coalition Pakistan” was established.
Lobbying meetings with policy-makers especially standing committee on finance was conducted to sensitize them on the issue. As a result, a resolution in favor of the project's aim was passed from the Senate of Pakistan.
Video testimonials of more than 70 key business leaders and policy-makers were recorded and uploaded on social media. Monthly newsletters were also developed and disseminated among stakeholders.
