Pakistan's Tax-to-GDP Ratio Falls Amidst the Pandemic

As Pakistan continues to curb the spread of the COVID-19 pandemic, its total revenue as a percentage of GDP has decreased to 3.2% in 1QFY2 from 3.4% in 1QFY20.

Pakistan's tax revenue as a percentage of its GDP is slightly lower in the first quarter of FY21 as compared to the same quarter last year. In 1QFY21, Pakistan's tax-to GDP ratio stood at 2.5%.

While a growth in non-tax revenue from 0.3% to 0.8% of GDP was seen during the first quarter of 2020, no improvement was recorded this year. The non-tax-to-GDP ratio remained at 0.8% in 1QFY21.

Although, tax revenue collected by the federal government witnessed a year-on-year decline of 2.7% in the first quarter of FY21, tax revenue collected by the provincial government increased 6.9% in 1QFY21 as compared to the same period last year.