Columbia International Affairs Online: Policy Briefs

CIAO DATE: 10/2010

Pakistan's Roller-Coaster Economy: Tax Evasion Stifles Growth

S. Akbar Zaidi

September 2010

Carnegie Endowment for International Peace

Abstract

Unable to sustain solid growth, Pakistan's economy is teetering on the brink of collapse, with one-third of the population living below the poverty line. S. Akbar Zaidi writes in a paper that Pakistan's economic instability stems in large part from low government revenue due to the elite's use of tax evasions, loopholes, and exemptions. Without tax reform, Pakistan will continue to run an unsustainable debt and be forced to rely on Western donors for bailouts.