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Income Tax Revenue as an Indicator of Regional Development in Pakistan


  • Ijaz Hussain

    () (Department of Economics, School of Social Sciences, Beaconhouse National University, Lahore.)

  • Sumbal Rana

    () (Department of Economics, School of Social Sciences, Beaconhouse National University, Lahore.)


The objective of this paper is to highlight the use of income tax revenue as an indicator of regional development in Pakistan. Initially, we identify a dramatic shift in income tax revenue trends at the provincial level for the period 1992/93 to 2005/06. We develop a simple model of income tax revenue and estimate the relationship between growth of income tax revenue and gross regional product (GRP). Based on the estimated relationship, Punjab appears to have been the fastest growing province during the 1990s, while Sindh shows the greatest level of dynamism in the current decade. This is attributed to high growth rates, especially in large-scale manufacturing during the period, which has a larger sectoral share in Sindh’s economy.

Suggested Citation

  • Ijaz Hussain & Sumbal Rana, 2009. "Income Tax Revenue as an Indicator of Regional Development in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 14(2), pages 135-152, Jul-Dec.
  • Handle: RePEc:lje:journl:v:14:y:2009:i:2:p:135-152

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    Income tax; development; revenue.;

    JEL classification:

    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes


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