Poor distribution of wealth
The Gini coefficient of Pakistan was 30.02 in 2008.
Wealth distribution is extremely uneven in Pakistan, with the top 10% of the population earning 27.6% of income, and the bottom 10% earning 4%. Amongst the rich in Pakistan, most of their wealth is not earned. Many have inherited it from their parents or had gained the money from underhand means such as corruption. Such situation is quite common in Pakistan’s political world. Many of Pakistan’s wealthy families are able to escape paying taxes which allows them to keep most of their income. A few rich families are able to avoid taxation as their income comes from agriculture, which under the law, cannot be taxed. (Burki, 2011)
With many wealthier families escaping taxation, the tax rate in Pakistan increases to cover up the amount that was supposed to be paid by the rich. The poor end up pay more, causing many to either fall below the poverty line or get pushed deeper into it. The tax system in the country has created a wider income gap between the rich and the poor.
Wealth distribution is extremely uneven in Pakistan, with the top 10% of the population earning 27.6% of income, and the bottom 10% earning 4%. Amongst the rich in Pakistan, most of their wealth is not earned. Many have inherited it from their parents or had gained the money from underhand means such as corruption. Such situation is quite common in Pakistan’s political world. Many of Pakistan’s wealthy families are able to escape paying taxes which allows them to keep most of their income. A few rich families are able to avoid taxation as their income comes from agriculture, which under the law, cannot be taxed. (Burki, 2011)
With many wealthier families escaping taxation, the tax rate in Pakistan increases to cover up the amount that was supposed to be paid by the rich. The poor end up pay more, causing many to either fall below the poverty line or get pushed deeper into it. The tax system in the country has created a wider income gap between the rich and the poor.