OVER the past 10 years the state’s tax effort has burdened compliant taxpayers more and more even as it has largely abandoned any attempt to broaden the tax base or bring in more taxpayers. The results are revealing when you look at the revenue numbers over the preceding decade.

From 2015 till 2025, for example, direct taxes became the largest contributors to the incremental revenue effort of the state. Around one-third of all incremental revenues collected in this decade came from direct taxes. The next biggest contributor was State Bank profits, a non-tax revenue contributor, at 19 per cent. Next up was the sales tax, also at 19pc, and then the petroleum development levy (PDL) at 9pc.

But if you look at the velocity of the growth, State Bank profits win as the fastest-growing contributor to the revenue effort, followed by the PDL, both far above 1,000pc growth over this decade (yes, you read that right — 1,000pc!). There are various reasons for why this might be the case. This decade is unusual for having the longest-running stint of double-digit interest rate; eight out of 10 years since 2015 saw the policy rate at or above 10pc. This automatically inflated State Bank profits.

Second, fuel prices saw massive increases largely due to the devaluations this decade is famous for. This led to equally massive PDL recoveries in nominal terms. In fact, in rupee terms, the nominal........

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