This final op-ed part will focus on the taxpayer’s mindset in Pakistan. Following human nature and economic rationale, no one wants to part with his hard-earned money even in the shape of tax being a contribution to enjoy a civilized society. Smart taxpayers avoid taxes by staying within the legal framework whereas scrupulous ones would opt for tax evasion which is liable to legal action. The taxpayer’s mindset develops in response to government legislation and tax policies. In our culture, the taxpayer believes that Pakistan inherited tax laws from the colonial era the focus of which was to extract the maximum without any consideration for economic growth and social welfare. Even today our economy is dependent on foreign loans for running day-to-day state business and these loans have attached conditionalities that are not business-friendly. The policy interventions by the government under the direction of donors like the International Monetary Fund (IMF) are considered an erosion of state authority. Moreover, it is believed that the governments are not representatives who legislate under the dictation of the foreign lending agencies and the pressure groups within the country an example of such legislation is the Income Tax Ordinance 2001, which was drafted by an Australian and went through 322 amendments before the date of its enforcement as it conflicted with earlier legislation and the administrative framework of the Income Tax department. Other reasons are also taken into consideration below. The taxpayer’s mindset develops in response to government legislation and tax policies. Penalty/ Prosecution against tax defaulters: In our culture seeing is believing. The compliance by the taxpayers improves if there is a probability of being caught and a certainty of penalty. When tax defaulters are let off scot-free due to the legal and administrative weaknesses then other persons also feel encouraged to follow suit which promotes the culture of tax evasion. The compliant taxpayers lose trust in the system feel demoralized and consequently avoid paying their due taxes. Non-user-friendly Information technology: Automation and IT intervention have been introduced to facilitate the taxpayers and are appreciated by the taxpayer however the IT interventions are not user-friendly and operate in silos. The semi-literate population is not inclined to use this software with ease and comfort. Delayed Refunds: The taxpayers have a persistent issue of delayed refunds due to the confiscatory withholding regime. The compliant taxpayer has no option to avoid this tax. The legislature has provided a mechanism for a refund of excessive deductions but the department under pressure to meet budgetary targets delays the refund without any legal basis. This is another discouraging factor that hinders the taxpayer from fulfilling his tax obligations and becoming a compliant taxpayer. Tax Litigation: The individual taxpayers and the corporate entities earning huge profits usually adopt the litigation and stay by the courts as a tool to delay or avoid their due tax liabilities. The tax evaders compare the cost of litigation over the period vis a vis their due tax liability and prefer to go for the legal shield instead of depositing their taxes. This practice by many taxpayers encourages the culture of preferring litigation instead of discharging the text liability as a responsible citizen. The lawyer community is the impetus of this culture. In the backdrop of the above analysis, it can safely be concluded that there is a distrust among the three stakeholders of the tax culture i.e., tax policymaker, tax collector, and taxpayer. They are operating in their spheres with their specific mindsets which has led to a lack of mutual trust among the three stakeholders resulting in low tax collection from that of the optimum level. The problem needs to be tackled in a well-defined conceptual framework. Following W. Richard Scot’s institutional theory of Regulative, Normative and Cultural-Cognitive approaches policy actions can be proposed and categorized within the three conceptual streams. Policy actions: The exemptions and concessions should be rationalized and restricted to the extent of general public welfare and the promotion of economic activity. To improve the trust of the masses in general and the taxpayers in particular the exemptions allowed to accommodate the elites of the society should be withdrawn. The distortions in the tax laws like presumptive tax regime and block taxation should be removed without yielding to any pressure group or lobby to avoid the complication of tax laws, increase revenue and provide a level playing field for all taxpayers. Alternate Dispute Resolution Committees should be decentralized at the regional level to make it an effective forum to resolve the issues of the taxpayers involving factual controversies to create confidence in the taxpayer in the tax system and promote a healthy culture. A full-fledged prosecution department manned with experienced lawyers is proposed on the pattern of the Advocate General’s office to defend the tax appeals efficiently and expeditiously. It is also proposed that the number of forums should be reduced to three i.e. Commissioner Appeals, Federal Tax Courts and the Apex Court. The departmental officers should not be posted in any appellate forum. The first forum may take up appeals about factual issues and small cases. The tax court should have jurisdiction to accept appeals with legal issues and cases of medium to large taxpayers. There should be a time limit for all forums to decide the cases keeping in view the principle of time value of money. There is no second opinion on the importance of IT for an effective, transparent and robust tax system. Integrated on real real-time basis, user-friendly and reliable IT systems are the most important factors in promoting the trust of the taxpayer in the system saving him from hassle and exploitation and creating ease of doing business for compliant taxpayers. Administrative measures: Market-based compensation package linked with a well-defined qualitative and quantitative performance monitoring system and strong internal accountability would be greatly helpful in modifying the mindset of the tax collector freeing him from the compulsions of sustenance and helping to change his attitude towards the taxpayer. South Asian culture believes in heroic traditions. The person known for his good deeds is respected and treated as distinguished. Using the tradition of the region public acknowledgement and appreciation of highest paying taxpayers would also promote the tax culture (Concluded). Muhammad Ausaf Ashraf studies at Bahria University Islamabad. He is interested in history, political economy and South Asian politics; Saud Bin Ahsen works at a Public Policy think tank.