The recent report by the United Nations Economic and Social Commission for Asia and the Pacific carries an important message for the government: the present level of personal income tax (PTI) compliance needs to be improved in order to realise effective transparency and accountability. The report further highlighted the fact that only 90 out of the total 341 members of the National Assembly had filed their income tax returns in 2012, which paints a dismal picture of Pakistan’s elected representatives. The reason why the imposition of new taxation is the sole prerogative of the National Assembly is because only the directly chosen representatives of the people can legitimately extract taxes and sanction their appropriation. If a majority of these legislators, who also because of their public office have to be held to a higher standard of accountability, are unconscientious enough to not file even file their returns, then the moral ground on which they legislate on taxes becomes extremely tenuous. However, the problem is far more pervasive than just the reluctance of legislators to file tax returns. Far less than viewing the payment of tax as an obligation and a duty towards the state, people in Pakistan see it as state sanctioned racketeering from which they must protect their wealth. The problem is further compounded by the popular perception of corrupt government officials filling their own coffers with the people’s tax money. While it is true that corruption is a serious problem, which has ubiquitous presence in all tiers of society, nevertheless, the solution is not to evade taxes. Pakistan’s abysmal tax collection system only makes inequality worse as then the government has to increase indirect taxes, which disproportionally burdens the poor. Moreover, the loss of revenue resulting from the government’s failure to collect taxes from the wealthy then makes it necessary to turn to international lending institutions such as the International Monetary Fund and the World Bank. In addition to locking the economy into a perpetual state of debt, how the prescriptive measures of these organisations, which are a part and parcel of the funds, have failed to achieve the desired results is fairly self-evident. A necessary requirement for an effective taxation system is information of the people: who owns what and how much. In fact, it was this functional requirement that led to the formation of the structure of the bureaucracy and this is its primary role. In Pakistan, despite the presence of an elaborate bureaucratic structure, the bureaucracy has failed to collect this information from the public. Moreover, in a country in which a low literacy rate is only made worse by its abysmal quality of education, filing tax returns is a daunting task. While the recently imposed penalties on non-tax filers has incentivised some people to file their tax returns, but, in lieu of a structured drive to bring all filers into the tax bracket by bringing to use local level bureaucratic machinery, people would continue to conceal their wealth from the government. Furthermore, in the absence of data of the national economy, including its property and class structure, devising any macroeconomic policy is akin to groping in the dark. Estimations and small-scale data collection projects are not an adequate replacement for the holistic picture that complete data of the national economy gives. This is the reason why good economic policy has evaded the policymakers of this country, and it is good economic policy that Pakistan needs to steer itself out of poverty and inequality. All of this is a reinforcing nexus, at the heart of which is the failure of the government to put in place an effective taxation system.*