DIGITAL TAX EVASION AND FISCAL INJUSTICE IN PAKISTAN: A CRIMINOLOGICAL AND COMPARATIVE POLICY ANALYSIS

Abstract

This paper examines the growing phenomenon of digital tax evasion in Pakistan, focusing on how cryptocurrencies, mobile wallets, and related digital payment systems create new vulnerabilities within the fiscal framework. The rapid expansion of digital finance has widened the gap between traditional tax regimes and emerging financial technologies, producing structural weaknesses that individuals and businesses exploit to conceal taxable income. The study analyzes key evasion techniques—including undisclosed crypto‑assets, fragmented and opaque transaction networks, and income routed through mobile‑wallet channels—and evaluates the effectiveness of existing regulatory responses.

In addressing these challenges, the paper proposes several preventive strategies such as mandatory disclosure of digital assets, formal recognition of online earnings as taxable income, and integrated data‑sharing mechanisms among NADRA, financial institutions, and the Federal Board of Revenue. It further highlights the ethical and societal implications of digital tax evasion, emphasizing its contribution to fiscal inequality and the disproportionate burden it places on compliant taxpayers.

Drawing on comparative prevention models from the United States, the United Kingdom, and the European Union, the study outlines a realistic framework for modernizing Pakistan’s tax system to enhance transparency, oversight, and compliance in the digital economy. This research offers valuable insights for criminology, public policy, and fiscal governance, providing practical guidance for policymakers, tax authorities, and scholars seeking to understand and mitigate digital financial offenses.