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Contemporary
Taxation
SUNAINAAZHAR (SP17-BAF-002)
ANMOL FATIMA (SP17-BAF-003)
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Tax Reforms In Pakistan
(1990-2010)
SAEED AHMED AND SAEED AHMED SHEIKH*
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INTRODUCTION
Governments need
 to maintain an adequate level of investment
 more effective public services
(Ahmed and Stern, 1991).
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INTRODUCTION
TAXES
 Main source of raising revenue in development
 Poorer countries relying on excise taxes and tariffs
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Tax system in Pakistan
 It is considered to be:
 Complex
 Inelastic
 Non-neutral
 In efficient
 Since 1970 many attempts have been made to improve
tax
 These Reforms basically aimed at broadening the tax
base, rationalizing tax rates, simplifying procedures and
strengthening tax administration
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Tax Reforms in Pakistan
 Setup in 1985
 For improving the taxation system
 Final report was submitted in 1986
 Commission made breif summary of the
recommendations with respect to direct & indirect tax
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Direct Tax
 Include personal income tax, the corporate income tax
and wealth tax.
 As regard direct tax 16 recommendations are made by
commission.
 Some of them are:
1. Bascic tax rate for private company should be
reduced from 55% to 45%
2. No intetference be made in existing rate structure
for personal income
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Indirect Tax
Major indirect tax include the sales tax, the custom
duties, the central excise duty
 National tax Reforms with respect to indirect tax:
 Custom duty
1. Custom duty should not be used as the source of
revenue generation
2. Reliance on customs tariff as tool to provide fiscal
incentives should be reduced
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Sales Tax
 Standard rates of adjustment for different may be
prescribed
 Roles of revenue generation should be assigned to
sales tax which should emerge as major revenue
generation tax
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Central excise duty
 Surprise checks may continue to be conducted but
by senior officer
 The system of self-clearance should be extended
to industrial units at present under the supervised
system
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Conclusion
 Tax to GDP ratio is very low in Pakistan
 Since 1990s
1. Share of tax revenue is declined from 80% to almost
70%
2. while share of non-tax revenue is increased from 20%
to almost 30%.
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Conclusion
As a result of administrative reforms
 Expected that overall tax culture will improve
but not
 Cash transactions, smuggling and corruption
are wide spread.
 Strong political and administrative will is
needed to improve
1. Tax culture
2. And tax structure in Pakistan
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THANKYOU
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