Zafar Iqbal
Taxation in a functioning society is not merely a financial transaction; it is a social contract rooted in reciprocity and trust. Citizens surrender a portion of their income with the understanding that the state, in return, will provide security, justice, infrastructure, education, healthcare, and opportunities for economic mobility. Roads are built, hospitals are maintained, schools are funded, and institutions are strengthened through public money. In such systems, paying taxes is rarely viewed as a burden alone because people can visibly see the benefits returning to their lives in tangible ways. The tax receipt becomes proof that the state is fulfilling its side of the bargain.
Pakistan’s crisis, however, lies not simply in low tax collection or narrow tax brackets, but in the erosion of this very relationship between the citizen and the state. The debate around taxation is often framed in technical terms — broadening the tax base, increasing rates, digitizing enforcement, or meeting International Monetary Fund conditions. Yet beneath these discussions sits a deeper and more uncomfortable reality: millions of Pakistanis do not trust that their sacrifices translate into public welfare. The issue is not only economic; it is psychological, political, and moral.
For decades, ordinary citizens have watched governments collect revenue while public services steadily deteriorated. Government schools in many parts of the country continue to suffer from absent teachers, broken infrastructure, outdated curricula, and poor learning outcomes. Public hospitals remain overcrowded and underfunded, forcing even middle-income families toward expensive private healthcare. Urban roads crumble under neglect, sewage systems fail during every monsoon season, and basic municipal services remain inconsistent even in major cities. Meanwhile, the judicial system moves at a pace that exhausts citizens financially and emotionally before justice can ever be delivered.
At the same time, Pakistan’s economic pressures have intensified. Rising electricity tariffs, repeated fuel price hikes, expensive gas, and increasing indirect taxes have placed extraordinary strain on households already struggling with inflation. Recent fiscal measures tied to external financing arrangements have further expanded the burden on salaried classes and small businesses, many of whom already operate close to survival margins. For low-income families, these policies are not abstract macroeconomic adjustments; they directly determine whether food, medicine, education, or transport remain affordable by the end of the month.
What makes this burden particularly painful is the visible inequality in how state failure is experienced. Wealthier segments of society often bypass public systems entirely. They rely on private schools, private hospitals, gated housing, generators during electricity outages, private security, and international opportunities for education or healthcare. In effect, they purchase alternatives to state dysfunction. The poor and lower middle class, however, remain trapped within failing public systems while simultaneously financing them through direct and indirect taxation. They carry the costs of governance without receiving its protections or benefits in return.
This imbalance has created a dangerous perception that taxation in Pakistan serves the preservation of state machinery rather than the welfare of citizens. Large portions of national revenue are consumed by debt servicing, administrative expenditures, subsidies benefiting influential sectors, and the continuous management of fiscal crises. Development spending that directly improves everyday life often appears secondary. As a result, many citizens increasingly view taxes not as contributions toward collective progress but as payments into an opaque structure that rarely delivers meaningful relief.
The state’s response has largely centered on enforcement: stricter documentation requirements, expanded surveillance of transactions, penalties for non-filers, and pressure on already compliant sectors. While such measures may temporarily increase collection, they cannot create a sustainable tax culture in the absence of legitimacy. Compliance built solely on coercion breeds resentment, avoidance, and informal economic behavior. History across many societies shows that durable tax systems emerge not only from strong enforcement but from public confidence that institutions are fair, transparent, and responsive.
Rebuilding that confidence requires more than speeches about patriotism or appeals to national duty. Citizens need visible evidence that public money is being used responsibly. Fiscal discipline must begin with the state itself: reducing wasteful expenditures, limiting elite privileges, reforming loss-making entities, and ensuring transparency in development spending. Accountability cannot remain selective or symbolic. When corruption cases disappear into silence while ordinary citizens face aggressive taxation, the credibility of the entire system weakens further.
Equally important is improving the quality of services people directly encounter in daily life. A functioning government school, a reliable public hospital, clean drinking water, dependable public transport, and efficient local administration create trust more effectively than any awareness campaign ever could. Citizens become more willing participants in taxation when they feel that the state recognizes their dignity and invests in their future.
Ultimately, Pakistan’s taxation challenge is inseparable from its governance crisis. Revenue collection and public service delivery are not two separate debates; they are reflections of the same broken social contract. A state that seeks greater compliance without improving justice, transparency, and welfare risks deepening alienation between itself and its citizens. But if governance improves, accountability becomes visible, and public institutions begin serving people with fairness and competence, taxation can gradually transform from a symbol of burden into a shared investment in national stability and collective progress.
