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A recent report from the World Bank highlights that Pakistan’s General Sales Tax (GST) is the main tax contributing to poverty in the country. On the other hand, a significant cash transfer program is making strides in reducing inequality. <\/p>\n
The report, titled \u201cThe Effects of Taxes and Transfers on Inequality and Poverty in Pakistan,\u201d shows that GST significantly impacts low-income households. The data revealed that families spend over 7% of their pre-tax income on GST, which adds to their financial struggles. The report emphasizes that GST is a key contributor to increasing poverty across Pakistan.<\/p>\n
Additionally, spending on pre-primary and primary education also plays a major role in creating inequality. This suggests that how public education is funded and delivered is critical in widening socio-economic gaps.<\/p>\n
### Positive Impact of Cash Transfers<\/p>\n
While indirect taxes like GST are burdensome for low-income communities, the Benazir Income Support Programme (BISP) stands out as a positive force. The report identifies BISP’s monthly cash payments to the poorest households as a vital measure for reducing inequality. According to the study, \u201cThe BISP cash transfer demonstrates the largest marginal contribution to inequality reduction.\u201d<\/p>\n
Looking forward, the World Bank has advised Pakistan to improve its domestic revenue collection and make public spending more efficient. They stress the importance of creating financial space to expand targeted social programs and enhance fairness in the fiscal system.<\/p>\n
### Need for Tax Reform and Improved Services<\/p>\n
The study also criticizes Pakistan’s current tax system, which largely relies on indirect taxes that tend to burden the poor more than others. The report points out that these regressive taxes and inefficient subsidy spending have been prioritized over fairer, direct taxation methods.<\/p>\n
The findings indicate that poorer households end up contributing more to the tax system than they receive. The report notes, \u201cThe poorest and most vulnerable households are net payers into the fiscal system, meaning they pay more in taxes than they get back in benefits.\u201d<\/p>\n
To address these issues in the long run, the report calls for reforms in public health and education funding to ensure these services are accessible and of high quality. Implementing such changes is essential to effectively tackle poverty and inequality in Pakistan.
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A recent report from the World Bank highlights that Pakistan’s General Sales Tax (GST) is the main tax contributing to poverty in the country. On the other hand, a significant cash transfer program is making strides in reducing inequality. The report, titled \u201cThe Effects of Taxes and Transfers on Inequality and Poverty in Pakistan,\u201d shows<\/p>\n","protected":false},"author":1,"featured_media":11947,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"rank_math_lock_modified_date":false,"footnotes":""},"categories":[30],"tags":[14076,1934,14077,14079,14078,2887],"class_list":["post-11946","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business-news","tag-gst","tag-pakistan","tag-pakistan-economy","tag-pakistan-tax-structure","tag-poverty-in-pakistan","tag-world-bank"],"_links":{"self":[{"href":"https:\/\/indiabulletinusa.com\/wordpress\/wp-json\/wp\/v2\/posts\/11946","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/indiabulletinusa.com\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/indiabulletinusa.com\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/indiabulletinusa.com\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/indiabulletinusa.com\/wordpress\/wp-json\/wp\/v2\/comments?post=11946"}],"version-history":[{"count":0,"href":"https:\/\/indiabulletinusa.com\/wordpress\/wp-json\/wp\/v2\/posts\/11946\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/indiabulletinusa.com\/wordpress\/wp-json\/wp\/v2\/media\/11947"}],"wp:attachment":[{"href":"https:\/\/indiabulletinusa.com\/wordpress\/wp-json\/wp\/v2\/media?parent=11946"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/indiabulletinusa.com\/wordpress\/wp-json\/wp\/v2\/categories?post=11946"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/indiabulletinusa.com\/wordpress\/wp-json\/wp\/v2\/tags?post=11946"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}