The Underground Economy and Tax Evasion in Pakistan: A Fresh Assessment

The underground economy and tax evasion have been a source of serious concern in Pakistan. This concern arises from the persistently low tax base and low tax elasticity and buoyancy, and consequently mounting fiscal deficit. Recently, not only economists but also sociologists, political leaders, policy-makers, non-governmental organizations, and the press are taking a lively interest in the size of the underground economy and tax evasion in Pakistan.