Are Some Taxes Better for Growth in Pakistan?A Time Series Analysis

Kashif Munir and Maryam Sultan ()

MPRA Paper from University Library of Munich, Germany

Abstract: This study analyzed the impact of taxes on economic growth of Pakistan for the period 1976 to 2014. The study has disaggregated taxes into direct and indirect tax. Indirect tax has further disaggregated into five categories (excise duty, sales tax, surcharges, tax on international trade and other taxes). By applying autoregressive distributive lag framework, study confirmed the existence of long run relationship between taxes and real GDP of Pakistan. Results indicate that in the long run direct tax, taxes on international trade, sales tax and other indirect taxes has positive and significant impact on real GDP. However, in the short run sales tax, tax on international trade and other tax have positive relationship, while excise duty has negative relation with real GDP of Pakistan. The results confirmed that direct tax, sales tax and tax on international trade are pro-growth taxes. Government should increase direct taxes as they have positive and significant impact on economic growth in the long run.

Keywords: Economic Growth; Direct Tax; Indirect Tax; ARDL; Pakistan (search for similar items in EconPapers)
JEL-codes: C22 H20 O40 (search for similar items in EconPapers)
Date: 2016-01-14
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Are some taxes better for growth in Pakistan? A time series analysis (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:68828

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