OGB F4D Program Facilitation & Cap Bldg. Extreme Inequality and the widening gap between rich and the poor: Extreme inequality is holding back inclusive growth and development in Pakistan. It plagues Pakistani society in many dimensions and is fueling a destructive, self-perpetrating spiral ofsocial polarization that is hindering economic growth and realization of basic rights for every citizen of Pakistan. According to the NationalNutrition Survey 2011, 58% of the households are insecure in Pakistan, and on the other richest ten per cent of Pakistanis have accumulated colossal assets in the last three decades and the poorest 72 million people are struggling for land entitlement, access to financial services, education, health facilities and every basic right that has been promised in the constitution of Pakistan. The situation of poor women is worst with no access to land, unfair wages, fewer employment opportunities and no access to financial services.
Many believe that inequality is somehow inevitable, or is a necessary consequence of globalization and technological progress.But Oxfam study in Pakistan and experiences from the ground has shown that, in fact, deliberate political and economic choices by the 'powerful' has lead to greater inequality.
Fiscal systems and Political Capture: Elites use their heightened political influence to curry government favors  including tax exemptions, land concessions and subsidies  while blocking policies that strengthen the rights of the many. It is widely believed that Pakistans taxation system is regressive and that it also allows a great deal of space for tax evasion. To varying degrees, both these issues are thought to reflect elite capture, thus forging a natural connection between inequality and the nature and magnitude of tax collection. An important indicator of the elite bargain is the mismatch between contribution to GDP and contribution to revenue. For example, agriculture sector contributes 21 percent to GDP but just 1 percent to taxation. The services sector contributes over 50 percent toGDP but only 30 percent to taxation. In a nutshell, powerful lobbies negotiate their own tax rates with the government bilaterally. Tax exemptions and concessions categorized as tax expenditure cost PKR 511billion and these concessions are embodied in the law. Consequently, there is a great mismatch between contributions to gross domestic product (GDP) (income) and tax revenue. As a corollary, the government has to rely on indirect taxes that have a disproportionate impact on common citizens. Indirect taxes, account for roughly 60 percent of Federal Board of Revenue (FBR) receipts.
Elite Capture through Financial Systems: Financial institutions in Pakistan favor powerful and the process of lending money is highly politicized. In 1996#2002, politically connected companies received 45 percent larger loans than other companies. These firms had a 50 percenthigher default rate on loans as well. The defaulted loans were inefficiently invested, leading to a further loss of an estimated 1.6 percent of GDP peryear which makes a total of Rs.67 billion. On the other side, lack of access to adequate financial services inhibits small and medium enterprises from playing their role as a vehicle for income generation and employment opportunities. In perspective of developing countries there is a need that private sector has to fulfill  responsibility of 'Respecting the human rights' byfulfilling UN guiding principles of business and human rights.

Public Finance Expenditure and allocation for development: In Pakistan, both the collection and utilization of public finances are heavily-politicized processes with limited citizen participation. InPakistan, the average net-worth of parliamentarians is $900,000, yet few of them pay any taxes. The low tax base and poorcollectionof taxes from corporate sector, have led to the unavailability of funds for provision of essential services , which is reflected through a meager percentage of GDP is allocated to meet the budgetary requirement for sectors such as Education, Health and social protection. In 2013 public spending on education was 2.1% of GDP and public spending on health was 1% of GDP in 2013, making Pakistan one of the lowest spenders worldwide.
We aim to change fiscal and financial systems to increase financefordevelopment, to tackle extreme inequality and poverty, to empower citizens to monitor how resources are spent and to increase financial inclusion.
IMPACT: Reduced social, economic inequalities and political capture leads to inclusive development forall citizens of Pakistan.

LONG-TERM OUTCOME: More women, youth and other citizens benefit from just/ fair fiscal system which is not politically captured, resulted in tackling extreme inequality and allocation/ spending of more funds for essential servicesi.e., education, health <(>&<)> social protection
Outcome 1: Strong national alliance of civil society organizations and other stakeholders established, capacitated and mobilizes masses to create strong demand for fiscal policy reforms
Outcome 2: Government ofPakistan introduces tax policy reforms, gradually increasing ratio of direct taxation by abolishing exemption regime and broadening tax net, through business <(>&<)> human rights National Action Plan
Outcome 3: Federal and Punjab Province governments graduallyincrease pubic allocations on education, health <(>&<)> social protection and ensure efficient utilization of allocated resources.

To achieve these long term outcomes Oxfam will work together with the Indus Consortium, PIPS (Pakistan Institute of Parliamentarians) and RFE (Rise for Equality).