United Nations Economic and Social Survey of Asia and Pacific (UNESCAP) 2024 forecast that Pakistan will continue to experience economic hardships, with GDP growth of 2% and inflation of 26% in the current fiscal year.
According to the UN estimate, GDP growth might reach 2.3%, while inflation is predicted to reach 12.2% in FY25.
Regarding the tax gap in the nation, the forum pointed out that, given the current fiscal year’s target of Rs9415 billion in tax collection (or roughly 9% of GDP), it could rise to over 12% of GDP compared to the Federal Bureau of Revenue’s (FBR) current tax-to-GDP ratio.
According to UNESCAP, tax gaps in nations like Bangladesh, Sri Lanka, and Pakistan are minor despite having low tax rates; nevertheless, if these gaps are expressed as a percentage of current tax collections as opposed to GDP, they may not be negligible.
This suggests that improving socioeconomic development and public governance along with a larger-scale increase in tax income is required, since improving tax administration and policies by themselves might not be sufficient to close the enormous financial gaps for development in low-tax nations.
The UN conference elaborated on the economic damages incurred by Islamabad, highlighting the detrimental impact of political instability on enterprises, which was further compounded by floods that caused disruptions to agricultural output.
