Despite the fact that in the current fiscal year, Pakistan is expected to achieve the highest growth rate of the decade at 5.3 percent, yet the continuous revenue, trade and current account deficits pose serious cause of concern. The expected figures of deficits at the close of this fiscal year are disturbing: current account at Rs 10 billion, trade at Rs 25 billion and fiscal at Rs 1.7 trillion. In first nine months of current fiscal year, the total revenues were Rs 3145 billion against total expenses of Rs 4383 billion giving rise to fiscal deficit Rs 1238 billion. If we add circular debt of Rs 400 billion, blocked refunds by FBR of Rs 200 billion and loans of public sector enterprises of Rs 175 billion, the fiscal deficit may reach Rs 2575 billion (nearly 7 percent of GDP). The consequences are obvious: more taxes in budget 2017-18, more borrowing. More taxes will retard growth and affect the fixed income earners and the poor. Further debts mean more squeezing of fiscal space — enormous debt-servicing leading to deadly debt trap that is to borrow just to pay interest of old debts. Debts are required to meet current expenditure — to bridge budget deficit. Those meant for development and creating income-yielding assets are not worrisme. The transition of Pakistan from ‘Kingdom of Heroin’ in Zia’s era to a “debt-enslaved state” under the rules of Benazir, Nawaz and Musharraf confirms how the country was pushed towards a state of helplessness, needing loans to pay interest on loans The latest figures of total public debt, available at the website of State Bank of Pakistan (SBP) — http://www.sbp.org.pk/reports/quarterly/fy17/Second/Chap-4.pdf present quite an alarming situation — see also http://www.sbp.org.pk/ecodata/Summary.pdf. There is another important document titled, Revision Study on External Debt Statistics, released by State Bank that narrates the history of our economic subjugation started in 1960s when the rulers started taking large intakes of foreign loans. With every loan came a host of conditions. These conditions ostensibly aimed at reforms, in fact meant to subjugate us, economically and politically. According to SBP’s data, total external debt & liabilities as on March 31, 2017 were of US$ 79.4 billion and domestic debt was of Rs 16 trillion. It is admitted fact that our economic managers, during the military and civilian rules alike, have been borrowing recklessly. Borrowing per se is not objectionable. But funds have been abused — wasted on huge perks and perquisites to the privileged classes and not for economic uplift of the country. Today’s Pakistan represents a State where a trio of militro-judicial-civil complex, businessmen-turned-politicians and absentee landlords sitting in houses, is very affluent, but the Government is poor, needing loans even to pay salary and other expenses of its employees. This state of affairs is the direct outcome of the policies of the successive governments, giving a free hand to tax evaders and plunderers of national wealth. The most painful aspect of debt-enslavement is converting Pakistan into a subservient, toothless-nuclear-state. The transition of Pakistan from ‘Kingdom of Heroin’ in Zia’s era to “debt-enslaved state” under rules of Benazir, Nawaz and Musharraf confirms how the country was pushed towards a state of helplessness, needing loans to pay interest on loans. The policies of appeasement towards the corrupt, laws protecting the dirty money and frequent tax amnesty schemes eroded the fiscal base, besides weaning away the writ of the state. The issue is how to get rid of debt-prison. The key to debt retirement is export-driven growth and collection of taxes fairly and justly, but firmly, without any favour or fear. The real tax potential of undeclared income/wealth in Pakistan is in trillions. Indonesia through a successful scheme has recently mobbed undeclared assets of around $300 billion! Pakistan can collect tax revenue of Rs. 10 trillion if there is political will and Federal Board of Revenue (FBR) is converted into an independent, efficient and professional agency on the pattern of Canadian Revenue Agency. The collection of taxes of even Rs. 8 trillion will not only eliminate fiscal deficit but provide ample funds for infrastructure projects, human resource development, health, education, transport and housing. With accelerated growth in exports and industrialisation, Pakistan can retire external and internal debts. The path to prosperity and self-reliance lies in convincing the masses taxes collected would be spent for their well-being and not on unprecedented benefits for the elites. It would require by actions and not through mere a lip-service. The government must earmark revenues for specific purposes and place the same in funds created for debt retirement, creation of employment zones and provisions for social services like education, health, transport, housing etc. This will inspire the people to contribute towards the national exchequer. This is the only way that revenues can be generated through voluntary compliance. The present policy of imposing irrational taxes, eg taxing even that portion of citizens’ income that they spend on educational and medical needs, can never produce any positive results. These are creating more inequalities in the society leading to social unrest and lawlessness. The government will have to improve law and order situation, reduce high charges of power and gas to attract foreign investors and give incentives to local businessmen to enter into joint ventures with them. If the Government is really interested to improve the situation it must remove high taxes, especially on petroleum products, that badly affect all sections of the society and make exportable goods uncompetitive. The writer, Advocate Supreme Court and Adjunct Faculty LUMS, has conducted extensive research on debt enslavement of Pakistan in historical context in his book, Pakistan: From Drug-trap to Debt-trap