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Tax Amnesties in Tax Reform Policy: A Case Study from Pakistan and Lessons for Developing Economies


  • Shahryar Bahawal

    (Corporate Tax Office, Federal Board of Revenue, 1st Floor, Post Refund Audit Cell, Corporate Tax Office, Nabha Road, Income Tax House, Lahore, Punjab, Pakistan)


An optimally designed tax amnesty scheme can serve as a strategic component in a larger tax reform process. Such a reform can particularly assist in the tax collection efforts of developing economies like Pakistan. Pakistan’s tax amnesty schemes in 2018 and 2019 helped grow the tax base substantially. India’s and Indonesia’s schemes in 2016 also showed promise. My study compares the recent tax amnesties adopted by these three countries (Pakistan, India and Indonesia). Based on these experiences, I propose improvements in the composition of Pakistan’s tax amnesty design. An optimal tax policy cannot rely only on wide-spread enforcement, particularly in countries with large underground economies--like Pakistan, India and Indonesia. Instead, it should focus more on the optimal amnesty design alongside targeted enforcement efforts, aimed especially at documenting and taxing large underground economic activities.

Suggested Citation

  • Shahryar Bahawal, 2021. "Tax Amnesties in Tax Reform Policy: A Case Study from Pakistan and Lessons for Developing Economies," Asian Journal of Law and Economics, De Gruyter, vol. 12(1), pages 37-71, April.
  • Handle: RePEc:bpj:ajlecn:v:12:y:2021:i:1:p:37-71:n:1
    DOI: 10.1515/ajle-2020-0059

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    References listed on IDEAS

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    Benami; FBR; policy tool; tax amnesty;
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