Unlocking Pakistan’s Revenue Potential

Serhan Cevik

No 2016/182, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; tax revenue; tax; GDP; real GDP; Tax Policy; revenue administration; tax bouyancy; tax elasticity; tax buoyancy; distortionary tax regime; tax concession; increase revenue yield; revenue efficiency; tax morale; boosting tax morale; tax efficiency; tax series; tax revenue elasticity; GST revenue elasticity; Corporate income tax; Personal income tax; Value-added tax; Asia and Pacific; Africa; Global (search for similar items in EconPapers)
Pages: 22
Date: 2016-08-26
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Citations: View citations in EconPapers (1)

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