Archive · Business Recorder
Domestic resource trap: When raising revenue shrinks the economy
For decades, a remarkably resilient idea has shaped economic policy across the developing world: before a government can invest, build infrastructure or expand public services, it must first “find the money”. This logic lies at the heart of Domestic Resource Mobilisation (DRM). Governments are urged to raise tax-to-GDP ratios, broaden tax bases and improve enforcement so that more resources can be mobilised domestically for development. There is an obvious truth here. Developing states need functioning tax systems. Pakistan cannot sustainably finance development while significant incomes, weal...
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