World Bank Report: GST Increases Poverty in Pakistan, Urges Fiscal Policy Reforms for Equity

• GST is a major driver of rising poverty in Pakistan
• GST accounts for over 7 percent of pre-tax household expenditures
• The burden of GST falls disproportionately on poor and vulnerable households
• GST has the highest marginal contribution to national poverty compared to other fiscal tools
• BISP is the most effective program in reducing inequality
• Spending on pre-primary and primary education has a negative impact on inequality
• The report calls for improved domestic revenue mobilisation and public spending efficiency
• Recommends expanding social spending, especially targeted cash transfers
• Advocates for reforms in public health and education services
• Criticises reliance on indirect taxes and underutilisation of direct taxes
• Points out inefficiencies in current subsidy expenditures
• Poorest households are net contributors to the fiscal system
• Urges restructuring of fiscal policies to protect at-risk populations and foster inclusive growth

Source: punemirror.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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