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Articles

Vol. 4 (2023): Panoply Journal

How have the PTI Government's taxation policies affected Pakistan's economic growth?

  • Dr. Syeda Sehrish Shakir Rizvi
Submitted
11 October 2023
Published
11/06/2023

Abstract

This research focuses on the taxation system in Pakistan, with a particular emphasis on its legal aspects and tax policy structure. It also examines the challenges faced by the tax system and the efforts made by the current government to implement new tax policies. The study utilized unique data collected from various sources, such as the Federal Board of Revenue, the International Monetary Fund, the Federal Tax Ombudsman, and the State Bank of Pakistan. The data used in the study covers the period from 2008 to 2021. The research findings indicate that Pakistan's economy has faced significant challenges for many years, with low consumer confidence and reluctance among private investors to invest in new ventures. However, the first year of Imran Khan's government witnessed improved political stability, lacking during the previous governments of the Pakistan Muslim League Nawaz and Pakistan Peoples Party. Tax-based fiscal strategies have been considered less effective in addressing fiscal deficits in developing nations. To analyze the impact of the taxation policies implemented by the Pakistan Tehreek-e-Insaaf government, this study employed an interpretive approach and qualitative research methodology. Secondary sources were used, including observational research design and a sampling period covering 13 years. The study has revealed that reducing tax rates does not necessarily lead to a decrease in future net revenue collection. Instead, it benefits the socioeconomic well-being of the lower-income population, as it expands the tax base and ultimately increases net revenue as individuals move up the socioeconomic ladder. Overall, this research provides insights into Pakistan's taxation system, its challenges, and the potential impact of tax policies implemented by the current government.

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