Unlocking Pakistan’s Revenue Potential
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Summary:
Despite the significant progress in recent years, Pakistan’s tax revenue remains low relative to comparator countries and the tax effort expected for the country’s level of development. In light of the potential endogenity of tax revenue and economic growth, this paper contributes to the literature by developing a novel identification strategy to estimate the short-run and long-run elasticities of tax revenue. The empirical findings indicate that a tax system with low elasticity cannot take full advantage of economic growth. Accordingly, unlocking revenue potential is dependent on broadening the tax base, strengthening administration, and rationalizing tax policy across all levels of the general government.
Series:
Working Paper No. 2016/182
Subject:
Corporate income tax Personal income tax Revenue administration Tax elasticity Tax policy Taxes Value-added tax
English
Publication Date:
August 26, 2016
ISBN/ISSN:
9781475530506/1018-5941
Stock No:
WPIEA2016182
Pages:
22
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