Corporate Tax Reforms in Pakistan
Ahmed, Vaqar; Talpur, Mustafa | April 2016
Abstract
Tax policy plays an important part in inclusive growth, incomes and wealth redistribution. Owing to a narrow tax base in Pakistan, the ability of taxes to alter distribution of incomes in favour of the poorest income quintiles has been limited. This paper specifically makes a case where private sector has been realizing anticipated profits however their rising incomes did not result in progressive changes in tax contribution. The ability of tax administrative machinery to check evasion has also remained weak.
Another important matter is how a distortive tax policy is preventing entry of new firms and investments which can potentially create greater competition and enhance consumer surplus. Since 2007 Pakistan’s economy has been witnessing low levels of investment. Despite low interest rates, the private sector credit has not picked up. The exports have declined during a period when Pakistan enjoys preferential market access from the European Union and the United States. While large firms operating domestically continue to growth, the survival and growth of new firms is weak.
According to several recent studies, part of the answer to this problem may lies in the way taxes are helping cartelization through exemptions and preferences in the direct (corporate) tax structure. We discuss this view in the light of recent tax directory published by the Federal Board of Revenue. Making use of the key informant interviews and focus group discussions involving the business community, tax officials, trade and consumer associations, we present some recommendations for the reform of corporate taxation in Pakistan.
Citation
Ahmed, Vaqar; Talpur, Mustafa. 2016. Corporate Tax Reforms in Pakistan. © Sustainable Development Policy Institute. http://hdl.handle.net/11540/6435.Keywords
Rural areas
Rural planning
Rural poverty
Development assistance
Aid in kind
Standard of living
Strategic planning
Development strategy
Water Shortage
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Available Water
Water Resources Development
Demand For Water
Drinking Water
Drinking Water And Sanitation
Development Challenges
Development Issues
Rural Development
Rural Development Projects
Rural Development Research
Sustainable Development
Underdevelopment
Health, Education, Water
Human Right To Water
Potable Water
Quality Of Water
Right To Water
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Safe Water
Water And Sanitation, Electricity
Economic development projects
Human rights and globalization
Developing countries
Community development
Water
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