# *Detailed SUMMARY of the article "Thrashing around" by Khurram Husain, Published in Dawn on June 12th, 2025:* The article criticizes *Pakistan*'s latest budget as a *fiscal malfunction* that pushes the state deeper into *financial non-viability*. The author argues that despite *favorable conditions* - including *establishment support*, *no meaningful opposition*, *economic stabilization*, *controlled inflation*, and *managed deficits* - the government has wasted a *hard-earned opportunity* for meaningful reform. Instead of implementing *strategic reforms*, the budget follows the same *ritual* of burdening *registered taxpayers* while avoiding *base broadening*. The budget claims to boost *exports* through *customs duty reductions* across thousands of *tariff lines*, but *exporters* show little enthusiasm. The most disappointing aspect is the lack of measures to *broaden the tax base*, with only steps to bring *online marketplaces* and the *digital economy* into the tax net while enhancing *tax commissioners'* powers. The author highlights *contradictory revenue measures*, including last year's taxation of *stationery* and *children's school supplies*, and this year's withdrawal of *tax rebates for teachers* despite praising *educated Pakistani youth* who earned *$400 million* as *freelancers*. *Salaried individuals* received minimal relief - enough for *one pizza delivery per month* - while the *finance minister* justified this as the correct *"direction of travel"*. The article traces Pakistan's failed tax reform history, starting with the *Reformed General Sales Tax (RGST)* bill in *2009* that died in parliament. Since then, the government has relied on *gimmicks* to squeeze revenue from *compliant taxpayers*, creating new categories like *'non-filer of tax returns'* in the *mid-2010s* and *'deemed income'* in *2022*. Various schemes from *2014* to *2024*, including *amnesty schemes*, *withholding taxes*, *point of sale machines*, and the *'Tajir Dost scheme'*, have failed to expand the tax base. The author concludes that this *decade-long effort* has only created *vast databases of non-compliant individuals* while the state continues *thrashing around* within *shrinking resource constraints*, leading to deeper *non-viability* as it's forced to *squeeze more from less* and *borrow the remainder*. # *Easy/Short SUMMARY*: *Pakistan*'s budget represents a *fiscal malfunction* wasting favorable conditions for reform. Despite *economic stability* and *political support*, the government offers no *strategic changes*, only burdening *compliant taxpayers*. *Tax measures* contradict rhetoric - taxing *teachers* while praising *youth* who earned *$400 million* as *freelancers*. Since the failed *RGST* in *2009*, Pakistan relies on *gimmicks* creating categories like *'non-filer'* and *'deemed income'*. A decade of failed schemes shows a state *thrashing around* in *shrinking resources*, heading toward deeper *non-viability*. # *SOLUTIONS of The Problem*: ## *1. Comprehensive Tax Reform* Revive and implement a *comprehensive tax reform* similar to *RGST* with proper parliamentary consensus and stakeholder buy-in. ## *2. Agricultural Tax Implementation* Bring the *agricultural sector* into the tax net through *provincial coordination* and *federal oversight*. ## *3. Retail Sector Formalization* Implement *mandatory POS systems* and *digital payment tracking* for retail businesses above certain thresholds. ## *4. Property Tax Overhaul* Reform *property taxation* based on *market values* and implement *annual reassessments*. ## *5. Digital Tax Infrastructure* Build robust *digital tax collection systems* and *automated compliance monitoring*. ## *6. Reduce Compliance Costs* Simplify *tax filing procedures* and reduce *bureaucratic hurdles* for honest taxpayers. ## *7. End Amnesty Culture* Stop repeated *amnesty schemes* that encourage non-compliance and reward tax evaders. ## *8. Cross-Party Tax Consensus* Build *political consensus* across parties for sustainable tax reforms beyond electoral cycles. ## *9. Strengthen Tax Administration* Enhance *FBR capacity* through training, technology, and performance-based incentives. ## *10. Economic Documentation* Mandate *digital transactions* for businesses above certain turnover thresholds to document the economy. # *IMPORTANT Facts and Figures Given in the article*: - *Pakistani freelancers* brought *$400 million* into the country. - Government expects *code writers* to earn *$90-$100 per hour* in coming years. - *Salaried individuals* got relief equivalent to *one pizza delivery per month*. - *RGST bill* failed in parliament in *2009*. - *'Non-filer of tax returns'* category created in *mid-2010s*. - *'Deemed income'* category invented in *2022*. - *Withholding tax* on bank transactions for non-filers started in *2014*. - *'Tajir Dost scheme'* announced in *2024*. # *IMPORTANT Facts and Figures out of the article*: - *Pakistan's tax-to-GDP ratio* is *10.1%*, among the lowest globally (*World Bank*, 2024). - Only *3.2 million people* file tax returns in a population of *240 million* (*FBR*, 2024). - *Agricultural sector* contributes *18.9%* to GDP but pays less than *1%* in taxes (*Economic Survey*, 2024). - *Informal economy* represents *40%* of Pakistan's GDP (*IMF*, 2024). - *Budget deficit* stands at *7.4%* of GDP (*Ministry of Finance*, 2024). - *Pakistan* has had *24 IMF programs* since *1958* (*IMF*, 2024). # *MCQs from the Article*: ### 1. *How much money did Pakistani freelancers bring into the country?* A. $300 million *B. $400 million* C. $500 million D. $600 million ### 2. *When did the RGST bill fail in parliament?* A. 2008 *B. 2009* C. 2010 D. 2011 ### 3. *What new taxpayer category was created in the mid-2010s?* A. Deemed income taxpayer *B. Non-filer of tax returns* C. Digital economy taxpayer D. Compliant taxpayer ### 4. *What was the relief given to salaried individuals equivalent to?* A. One meal per month *B. One pizza delivery per month* C. One movie ticket per month D. One coffee per month ### 5. *What does the author call the latest budget?* A. Progressive reform B. Strategic change *C. Elephantine mediocrity* D. Fiscal innovation # *VOCABULARY*: 1. *Malfunction* (خرابی) – Failure to work properly 2. *Non-viability* (غیر عملی) – Not capable of working successfully 3. *Sugar-coating* (چھپانا) – Making something seem better than it is 4. *Pious-sounding* (دینداری کا دکھاوا) – Appearing religious or moral 5. *Well-trodden* (مشہور راہ) – Frequently traveled or familiar path 6. *Far-reaching* (وسیع اثرات) – Having extensive influence 7. *Raging inferno* (بھڑکتی آگ) – Intensely burning fire 8. *Doused* (بجھایا) – Extinguished or put out 9. *Runaway* (قابو سے باہر) – Out of control 10. *Respite* (آرام) – Short period of rest or relief 11. *Hard-pressed* (مشکل میں) – Having difficulty 12. *Bombshell* (بم) – Shocking surprise 13. *Abruptly* (اچانک) – Suddenly and unexpectedly 14. *Paeans* (تعریفی گیت) – Songs of praise 15. *Recalcitrant* (ضدی) – Stubbornly refusing to comply 16. *Prodded* (ابھارا) – Urged or encouraged 17. *Mainstreamed* (عام کیا) – Brought into common use 18. *Dormant* (غیر فعال) – Inactive or sleeping 19. *Thrashing around* (بے قابو حرکت) – Moving violently or struggling 20. *Elephantine* (ہاتھی جیسا) – Extremely large and clumsy 📢 *Attention Please!* We appreciate your commitment to acquiring knowledge through our summaries. 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Click the link below to join now 🔗 [Dawn Article Summaries](https://cssmcqs.com/dawn-editorials-articles-summary-for-students-pdf-download/) *WhatsApp Channel Link*: [https://whatsapp.com/channel/0029Va7tT3o35fLnJeFbpS2y](https://whatsapp.com/channel/0029Va7tT3o35fLnJeFbpS2y) --- *www.dawn.com* *Thrashing around* *Khurram Husain* *6–7 minutes* WE are now in the advanced stages of a fiscal malfunction that is causing the state in Pakistan to sink deeper into financial and economic non-viability. There is no point sugar-coating this harsh reality. For too many years now, we have been repeating what is now a familiar ritual, where the budget is announced accompanied with pious-sounding intentions, well-meaning rhetoric, and pointed reminders about the state's constraints. And yet the only thing that changes is the increase in the burden on those who are registered, compliant taxpayers. The budget announced on Tuesday follows this well-trodden path. This was the year to make something big happen. Rarely have conditions been more favourable for a government to undertake far-reaching change. The powerful establishment stands behind them. There is no opposition worth the name in parliament. The economy has stabilised. The raging inferno of inflation has been doused. The runaway fiscal and external sector deficits have been either converted into surpluses or at least brought within manageable bounds. There is political and economic stability in the country. Never mind for now the blood, sweat and tears through which this brief moment of respite has been procured. The question to ask is what are they doing with this hard-earned moment of opportunity? We now have our answer. There is not a single reform measure in this budget. No strategic change of direction is indicated anywhere. They claim to be trying to boost exports through wide-ranging reduction in custom duties across thousands of tariff lines but one is hard-pressed to find an exporter who is keen on this proposal. The most significant area one looks for in a budget are measures designed to broaden the base of taxation. And all we find is steps designed to bring online marketplaces, incomes and transactions of the digital economy into the net and ramp up the powers of tax commissioners to penalise those refusing compliance. There are revenue measures to make you cry. Last year, they taxed stationery and children's school supplies. This year they have dropped a bombshell of a tax on teachers by abruptly withdrawing a tax rebate that they had only a few days ago committed they would keep. And then they sat in their ritual 'post-budget press conference' and told us how much they value the work of educated Pakistani youth, who have brought $400 million into the country as freelancers, adding that they would like to see these same code writers make $90 to $100 per hour or something like that in the years to come. There is not a single reform measure in this budget. No strategic change of direction is indicated anywhere. This is vintage budget theatre. Put the tax burden on teachers and professors, tax students' school supplies, then sing paeans to the productive energies of the youth. Wag a finger at those who pay no taxes in this country. And with the other hand pick the pockets of those who do. Salaried individuals got relief sufficient maybe to pay for a pizza delivery per month. The finance minister justified this by saying the "direction of travel" is correct, even if the distance covered is not satisfactory, adding that things that go up rarely ever come down where taxes are concerned. This is a polite way of saying 'count your blessings, others would have given you even less than what I did'. But let's talk about the "direction of travel" for a moment. The last major tax reform that was attempted in Pakistan was the so-called Reformed General Sales Tax, or RGST, bill back in 2009. It died a loud and messy death in parliament as even the government's coalition partners at the time refused to vote for it. Since then, we have been reduced to clever little gimmicks to squeeze more and more revenue out of those foolish enough to be registered and complying with the tax laws of the country. Along the way, we have invented whole new categories of taxpayers, and whole new income streams. Somewhere around the middle of the 2010s we had a new category of taxpayer called 'non-filer of tax returns'. In 2022, the government invented the category of 'deemed income'. Along the way, we had amnesty schemes, incentives and penalties to try and get recalcitrant non-filers to register, and pay their taxes. It began in 2014 with an amnesty scheme and a withholding tax on bank transactions of non-filers. It continued through 2019 when the FBR was prodded into serving tens of thousands of notices to non-filers in the services sector. It continued in 2021 when we were supposed to collect tens of billions of rupees from 'point of sale machines' that were going to be mainstreamed across the retail sector. It raced passed 2022 when incomes were deemed to have come from otherwise dormant assets on the wealth statements of the rich, and taxes were to be collected from shopkeepers based on power consumed and the square footage of their outlets. In 2024 we had the 'Tajir Dost scheme', announced by the same finance minister who gave us the latest budget. And what do we have to show for this decade-long effort? Vast databases of non-compliant individuals and businesses? All these schemes and gimmicks show us a state thrashing around within the shrinking confines of its resource envelope. Meanwhile, every year the same ritual plays out. A new scheme is announced, and the burden on those who pay is increased further, while we are all reminded that times are hard and the fiscal space is limited. This stasis, this inability to drive any change, is taking the state deeper and deeper into non-viability as it is forced to squeeze more from less and borrow the remainder. This was the year when that could have changed. Instead, we got this elephantine mediocrity they're calling a budget. Another year of treading water. Another year of limping from one IMF review to the next, with no end in sight. The writer is a business and economy journalist. Published in Dawn, June 12th, 2025