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An analysis of Tax Buoyancy Rates in Pakistan

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  • Rasheed, Farooq

Abstract

By using econometric techniques for estimating tax elasticities, this paper finds significant but low tax buoyancy rates for GDP, M0 and volume of trade. Surprisingly, the theoretically important factor of tax evasion (SFTR) was found to be ineffective. This indicates that SFTR is not an adequate measure of tax evasion. There is no significant association between tax revenue growth and investment, credit, public debt and inflation. This illustrates the weakness of the tax regime in Pakistan.

Suggested Citation

  • Rasheed, Farooq, 2006. "An analysis of Tax Buoyancy Rates in Pakistan," MPRA Paper 43388, University Library of Munich, Germany, revised 01 Jul 2006.
    • Handle: RePEc:pra:mprapa:43388
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    File URL: https://mpra.ub.uni-muenchen.de/43402/1/MPRA_paper_43402.pdf
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    References listed on IDEAS

    as
    1. Vito Tanzi, 1989. "The Impact of Macroeconomic Policies on the Level of Taxation and the Fiscal Balance in Developing Countries," IMF Staff Papers, Palgrave Macmillan, vol. 36(3), pages 633-656, September.
    2. M. Ghaffar Chaudhry, 2001. "Theory of Optimal Taxation and Current Tax Policy in Pakistan’s Agriculture," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 40(4), pages 489-502.
    3. David J. Pyle, 1989. "Tax Evasion and the Black Economy," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-08488-3.
    4. Raja J. Chelliah, 1971. "Trends in Taxation in Developing Countries (Les tendances de la fiscalité dans les pays en voie de développement) (Tendencias tributarias en los países en desarrollo)," IMF Staff Papers, Palgrave Macmillan, vol. 18(2), pages 254-331, July.
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    Cited by:

    1. Abdul Qadir Patoli & Tayyab Zarif & Nadeem A. Syed, 2012. "Impact Of Inflation On Taxes In Pakistan: An Empirical Study Of 2000-2010 Period," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 8(2), pages 8-4.
    2. Brima Ibrahim Baimba Kargbo & Adegbemi Festus O. Egwaikhide, 2012. "Tax Elasticity in Sierra Leone: A Time Series Approach," International Journal of Economics and Financial Issues, Econjournals, vol. 2(4), pages 432-447.
    3. Richard Adeleke, 2022. "Spatial variability of the predictors of government tax revenue in Nigeria," SN Business & Economics, Springer, vol. 2(1), pages 1-20, January.
    4. Abdul Qadir Patoli & Tayyab Zarif & Nadeem A.Syed, 2012. "Impact Of Inflation On Taxes In Pakistan: An Empirical Study Of 2000-2010 Period," IBT Journal of Business Studies (JBS), Ilma University, Faculty of Management Science, vol. 8(2), pages 31-41.

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    More about this item

    Keywords

    TAX BUOYANCY;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory

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