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Pakistan: Land, People, Society

Pakistan has a tax system that favors large landowners over industry, with agriculture accounting for a quarter of GDP but only 1% of tax revenue. This undermines democracy and encourages Islamization as an alternative path to social justice. While periods of economic growth in the 1980s and 2000s reduced poverty for some, rural populations in Sindh and Balochistan still experience grinding poverty according to unreliable estimates that range from 28% to over 50% living below the poverty line.

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38 views

Pakistan: Land, People, Society

Pakistan has a tax system that favors large landowners over industry, with agriculture accounting for a quarter of GDP but only 1% of tax revenue. This undermines democracy and encourages Islamization as an alternative path to social justice. While periods of economic growth in the 1980s and 2000s reduced poverty for some, rural populations in Sindh and Balochistan still experience grinding poverty according to unreliable estimates that range from 28% to over 50% living below the poverty line.

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TAYYABA AMJAD L1F16MBAM0221
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© © All Rights Reserved
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PAKISTAN: LAND, PEOPLE, SOCIETY

just one example, USAID provides around $45 million for family planning programmes
which have been chronically under-funded from government sources. The political power of
big landowners continues to block the introduction of an agricultural income tax and thereby
improve Pakistan’s woeful tax to GDP ratio 9 per cent. In a country of some 190million
people, there are only 2.7 million registered taxpayers. Significantly, agriculture, which
accounts for nearly a quarter of Pakistan’s GDP, provides only 1 per cent of its tax revenues.
In favoring is to the detriment of industry, which has a tax share three times its contribution
to GDP.

The failure to bring the wealthy into the tax net has undermined the consolidation of
democracy and is a factor in encouraging the notion that Islamization would bring greater
social justice in its wake. State-sponsored Islamization in the 1980s concentrated, however,
on the punitive aspects of Islamic law rather than on the encouragement of egalitarianism.
Periods of rapid economic growth in the 1980s and in the early years of the twenty-first
century have seen some ‘trickle down’ effects, with a concomitant rise in life expectancy and
lifting of sections of the population out of poverty. Nonetheless, grinding poverty affects
rural populations in Sindh and Balochistan.

Estimates of the incidence of poverty in Pakistan are difficult not only because of faulty
survey design, but inaccuracies in the raw official data. The World Bank estimated that 28.3
per cent of the populations were living below the poverty line in 2004-5. This global figure
masks trends across the provinces and between urban and rural settings. The Social Policy
Development Centre produced the breakdown for 2001-2 shown in Table 1.

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