Pakistan: A Preliminary Assessment of the Tax System, 2006
[Project Details]
Professor Jorge Martinez made a two-week field trip to Islamabad in March 2006. Based on the interviews and research performed on this mission, the Preliminary Assessment of the Tax System in Pakistan was completed.
Section I of the assessment provides a brief general overview of the tax system in Pakistan . Section II of the report provides an evaluation of Pakistan 's tax system. Besides trying to explain the underperformance in revenue collections relative to GDP, the report examines Pakistan 's revenue buoyancy and stability over time. The evaluation takes stock of the recent performance of Pakistan's tax system vis-à-vis other important objectives of any tax system and examines the vertical and horizontal distribution of tax burdens, the relative distortions or excess burdens introduced by the tax system in the decisions of economic agents, and some of the salient features in tax administration and taxpayer compliance. One goal of this evaluation is to identify the important avenues for reform in the tax system. Section III of the report reviews the current tax structure and discusses some of its most important flaws.
Because of the need to change the approach to tax policy formulation and the desirability of exploring more comprehensive tax reform to arrive at a more coherent, simpler and more elastic tax system, the report includes the process of tax policy formulation and evaluation of current fiscal analysis capabilities in Section IV. The report concludes with Section V with a discussion of the way forward and recommendations both for the medium term and for the short term.
| Project: | Pakistan: A Preliminary Assessment of the Tax System |
| Date: | March 2006 – April 2006 |
| Team Leader: | Prof. Jorge Martinez-Vazquez |
| Project Team: | Prof. Jorge Martinez-Vazquez |
| Location: | Islamabad, Pakistan |
| Counterpart: | Federal Board of Revenue http://www.fbr.gov.pk/default.asp |
| Contractor: | The World Bank |
