Dr. Vaqar Ahmed and Muhammad Adnan

Abstract 

This paper focuses on the household perceptions across
Pakistan regarding the necessary taxation and energy sector reforms. The key
objectives are to assess: a) the understanding of respondents regarding
challenges and interventions under both reform programmes, and b) willingness
to embrace the adjustment that may be required to implement reforms. The survey
reached out to 3,800 households in certain districts, including Faisalabad,
Hyderabad, Karachi, Multan, Peshawar, Rawalpindi, and Quetta. The timing of
this survey is important, as it was carried out immediately after the 2013
general elections. This exercise, therefore, provides a good benchmark against
which public expectations from the government can be traced as the tenure
proceeds. The findings of this survey shows that, most respondents’ ignorance
about    tax default results  in an increase in fiscal deficit and
government borrowing, which in turn create inflation and reduce purchasing
power. Also, there is a lack of understanding about the fact that the rootcause
of energy crisis is the continuous reliance on subsidies and power theft. This
survey also provides two important entry points for the policy makers. First, a
significant proportion of population is willing and has ability to pay a)
increased taxes if decent utilization of their contributions is demonstrated,
and b) higher power bills if given a certainty of reduction in unscheduled
power cuts. Second, any painful future adjustment resulting from economic
reforms will also require taking in to confidence those segments of population
who do not trust the current tax administration machinery and energy sector
governance.