Archive · 25 May 2025
World Bank: Pakistan's GST Contributes to Poverty, BISP Helps
A World Bank study found that Pakistan's General Sales Tax (GST) is making poverty worse.
GST takes up a large part of what low-income families spend, causing them financial strain.
The study suggests the government should collect more taxes and spend them more wisely.
The Benazir Income Support Programme (BISP), which gives money to the poorest families, helps reduce inequality.
The report criticizes Pakistan's tax system for relying on indirect taxes like GST and not enough on taxes that target richer people.
Poor families end up paying more in taxes than they receive in benefits.
World Bank study finds Pakistan's GST is a key driver of rising poverty levels.
GST consumes over 7% of households' pre-tax spending, burdening low-income families.
The Benazir Income Support Programme (BISP) is identified as the most effective tool for reducing inequality.
The report calls for enhancing domestic revenue and improving expenditure efficiency.
The study criticizes Pakistan's tax system for its dependence on indirect taxes and lack of progressive direct taxation.
- Who
- The World Bank conducted the study.
- What
- The World Bank study found that Pakistan’s General Sales Tax (GST) is a major contributor to rising poverty levels.
- When
- The study was recently conducted.
- Where
- Pakistan
- Why
- The current tax system relies on indirect taxes, which are more impoverishing to low-income families. It also lacks emphasis on progressive direct taxation.
- Country
- Pakistan
- Key Factor
- General Sales Tax (GST)
- GST impact on spending
- Over 7%
- Effective Tool
- Benazir Income Support Programme (BISP)
- Recommendation
- Improve expenditure efficiency