IDEAS home Printed from https://ideas.repec.org/a/pje/journl/article13wini.html
   My bibliography  Save this article

Incidence of general sales tax in Pakistan : Latest estimate

Author

Listed:
  • Haroon Jamal*
  • Sohail Javed**

Abstract

The study provides estimates of overall incidence, as well as, the distribution and burden of General Sales Tax across household welfare levels by applying the latest available household consumption data. The analysis is carried out at national, regional and provincial levels; separately for food, non-durable and durable expenditure items. Effective GST rate across deciles of per capita expenditure and Kakwani Summary Index of tax progressivity are estimated for the year 2010-11. Results in general, indicate proportionality of GST incidence associated with some progressivity at the upper part of income distribution. The relative intensity in terms of magnitudes of Kakwani Index indicates regressivity in GST on food and progressivity on durable expenditure items. A simulation exercise is also carried out to observe the impact of non-uniform GST rates for expenditure commodity groups on distribution of the tax burden.

Suggested Citation

  • Haroon Jamal* & Sohail Javed**, 2013. "Incidence of general sales tax in Pakistan : Latest estimate," Pakistan Journal of Applied Economics, Applied Economics Research Centre, vol. 23(2), pages 73-95.
    • Handle: RePEc:pje:journl:article13wini
    as

    Download full text from publisher

    File URL: http://aerc.edu.pk/wp-content/uploads/2016/08/Article_34Paper-555-In-1.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Nasim Shah Shirazi & Muhammad Ilyas & Mehboob Ahmad, 2001. "Redistributive Effects of Fiscal Policy across the Income Groups in the Urban-Rural Areas of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 40(4), pages 519-533.
    2. Miss Saadia Refaqat, 2003. "Social Incidence of the General Sales Tax in Pakistan," IMF Working Papers 2003/216, International Monetary Fund.
    3. Muhammad Hussain Malik & Najam Us Saqib, 1989. "Tax Incidence by Income Classes in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 28(1), pages 13-26.
    4. Umir Wahid & Sally Wallace, 2008. "Incidence of Taxes in Pakistan: Primer and Estimates," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0813, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    5. Rodrigo Cubero & Ivanna Vladkova Hollar, 2010. "Equity and Fiscal Policy: The Income Distribution Effects of Taxation and Social Spending in Central America," IMF Working Papers 2010/112, International Monetary Fund.
    6. Shahnaz Kazi, 1984. "Intersectoral Tax Burdens in Pakistan.A Critical Review of Existing Evidence and Some New Estimates," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 23(4), pages 553-572.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Faiz Ur Rehman & Muhammad Nasir, 2018. "In the Same Boat, but not Equals: The Heterogeneous Effects of Indirect Taxation on Child Health in Punjab-Pakistan," PIDE-Working Papers 2018:158, Pakistan Institute of Development Economics.
    2. Iffat Ara, 2023. "Estimating the Distributional Burden of General Sales Tax in Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 62(3), pages 395-408.
    3. Rehman Faiz Ur & Nasir Muhammad, 2020. "In the Same Boat, but not Equals: The Heterogeneous Effects of Indirect Taxation on Child Health in Punjab-Pakistan," Asian Journal of Law and Economics, De Gruyter, vol. 11(3), pages 1-26, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Faiz Ur Rehman & Muhammad Nasir, 2018. "In the Same Boat, but not Equals: The Heterogeneous Effects of Indirect Taxation on Child Health in Punjab-Pakistan," PIDE-Working Papers 2018:158, Pakistan Institute of Development Economics.
    2. Rehman Faiz Ur & Nasir Muhammad, 2020. "In the Same Boat, but not Equals: The Heterogeneous Effects of Indirect Taxation on Child Health in Punjab-Pakistan," Asian Journal of Law and Economics, De Gruyter, vol. 11(3), pages 1-26, December.
    3. Saadia Refaqat, 2005. "Redistributive Impact of GST Tax Reform: Pakistan, 1990-2001," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 44(4), pages 841-862.
    4. Shah, Anwar & Whalley, John, 1990. "An alternative view of tax incidence analysis for developing countries," Policy Research Working Paper Series 462, The World Bank.
    5. Martin Rama & Tara Béteille & Yue Li & Pradeep K. Mitra & John Lincoln Newman, 2015. "Addressing Inequality in South Asia," World Bank Publications - Books, The World Bank Group, number 20395, December.
    6. Barrientos, Armando, 2011. "On the Distributional Implications of Social Protection Reforms in Latin America," WIDER Working Paper Series 069, World Institute for Development Economic Research (UNU-WIDER).
    7. Engel, Eduardo M. R. A. & Galetovic, Alexander & Raddatz, Claudio E., 1999. "Taxes and income distribution in Chile: some unpleasant redistributive arithmetic," Journal of Development Economics, Elsevier, vol. 59(1), pages 155-192, June.
    8. Nasim Shah Shirazi & Muhammad Ilyas & Mehboob Ahmad, 2001. "Redistributive Effects of Fiscal Policy across the Income Groups in the Urban-Rural Areas of Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 40(4), pages 519-533.
    9. Paul Mosley, 2012. "The politics of what works for the poor in public expenditure and taxation: a review," Global Development Institute Working Paper Series esid-011-12, GDI, The University of Manchester.
    10. Osaid Alshamleh & Glenn P. Jenkins & Tufan Ekici, 2023. "Excise Tax Incidence: The Inequity of Taxing Obesity and Beauty," Development Discussion Papers 2023-06, JDI Executive Programs.
    11. Monica Brezzi & Luiz de Mello, 2016. "Inequalities in Latin America: Trends and implications for Policy," Hacienda Pública Española / Review of Public Economics, IEF, vol. 219(4), pages 93-120, December.
    12. Cabrera, Maynor & Lustig, Nora & Morán, Hilcías E., 2015. "Fiscal Policy, Inequality, and the Ethnic Divide in Guatemala," World Development, Elsevier, vol. 76(C), pages 263-279.
    13. Vaqar Ahmed & Cathal O'Donoghue, 2009. "Redistributive Effect of Personal Income Taxation in Pakistan," Working Papers 0143, National University of Ireland Galway, Department of Economics, revised 2009.
    14. Khalil Ahmad & Safdar Ali & Ayesha Haider & Muhammad Shahid & Muhammad Mudassar Naushahi, 2021. "Fiscal Implications for Rural-Urban Income Inequality: The Case of Pakistan," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(2), pages 246-259.
    15. Faiz Mohammad, 1987. "Agricultural Taxation in Pakistan Revisited," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 26(4), pages 419-432.
    16. Djeneba Doumbia & Mr. Tidiane Kinda, 2019. "Reallocating Public Spending to Reduce Income Inequality: Can It Work?," IMF Working Papers 2019/188, International Monetary Fund.
    17. EDO Onome Christopher, 2021. "Direct Taxes and Income Redistribution in Nigeria," GATR Journals gjbssr596, Global Academy of Training and Research (GATR) Enterprise.
    18. Giovanni Andrea Cornia & Juan Carlos Gómez-Sabaini & Bruno Martorano, 2012. "A New Fiscal Pact, Tax Policy Changes and Income Inequality," Working Papers - Economics wp2012_03.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    19. Mr. Antonio David & Mr. Martin Petri, 2013. "Inclusive Growth and the Incidence of Fiscal Policy in Mauritius: Much Progress, But More Could be Done," IMF Working Papers 2013/116, International Monetary Fund.
    20. Wayne Thirsk, 2008. "Tax Policy in Pakistan: An Assessment of Major Taxes and Options for Reform," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0808, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pje:journl:article13wini. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Samina Khalil (email available below). General contact details of provider: https://edirc.repec.org/data/aekarpk.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.