Property Taxes and State Incapacity in Pakistan

Property taxes are progressive and a good way of directly taxing the rich to pay for social services, but they are under-used globally, especially in developing countries. This book offers insights into why property tax collection is exceptionally low in the Punjab, delving into the politics of decentralization and the failed attempt to establish viable local governments during President Musharraf's era. It finds that dysfunction at multiple levels exists for good reasons and suggests that any reform initiative cannot move forward without understanding the underlying reasons of why things are the way they are.

Format: Paperback / softback
Length: 246 pages
Publication date: 12 June 2022
Publisher: OUP Pakistan

Property taxes are considered progressive and a good way of directly taxing the rich to pay for social services for all at the local level. However, they tend to be under-used globally, especially in developing countries. This book offers some explanations on why property tax collection is exceptionally low in the Punjab. In doing so, it delves into the politics of decentralization and yet another failed attempt to establish viable local governments during the era of President Musharraf. Based on original research and the author's long experience in the civil service, the book brings out the motivations of politicians and bureaucrats at the various levels of government, the interplay and frictions within the various tiers of the tax department, as well as the interaction between the tax collectors and the taxpayers. It finds that dysfunction at multiple levels exists for good reasons and perhaps even by design. The book is insightful on issues of tax policy and administration; intergovernmental fiscal relationships; perverse incentives for subnational governments to raid the fiscal commons than raise own tax revenues; weak institutional capacities; non-existent fiscal contracts between the state and citizens and the missing loop of political accountability; working of street-level bureaucrats, etc. Any reform initiative, be it of a certain tax, an institution, or of the wider governance structure, cannot move forward meaningfully without understanding the underlying reasons of why things are the way they are, in the first place.

Property taxes are considered progressive and a good way of directly taxing the rich to pay for social services for all at the local level. However, they tend to be under-used globally, especially in developing countries. This book offers some explanations on why property tax collection is exceptionally low in the Punjab. In doing so, it delves into the politics of decentralization and yet another failed attempt to establish viable local governments during the era of President Musharraf. Based on original research and the author's long experience in the civil service, the book brings out the motivations of politicians and bureaucrats at the various levels of government, the interplay and frictions within the various tiers of the tax department, as well as the interaction between the tax collectors and the taxpayers. It finds that dysfunction at multiple levels exists for good reasons and perhaps even by design. The book is insightful on issues of tax policy and administration; intergovernmental fiscal relationships; perverse incentives for subnational governments to raid the fiscal commons than raise own tax revenues; weak institutional capacities; non-existent fiscal contracts between the state and citizens and the missing loop of political accountability; working of street-level bureaucrats, etc. Any reform initiative, be it of a certain tax, an institution, or of the wider governance structure, cannot move forward meaningfully without understanding the underlying reasons of why things are the way

Dimension: 216 x 138 (mm)
ISBN-13: 9780190702557