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The implication of the value added tax in Pakistan: administration, experiences and fears

Author

Listed:
  • Zaman, Nadeem Uz
  • Ghutai, Gul
  • Zaidi, Syed Raza Irfan Shah

Abstract

Since its first imposition in France, the value added taxation has become so popular that except USA there is no other country left that does not have VAT in use. Pakistan has fulfilled its international obligation to replace its sales tax with VAT by the year 2010. This paper examines the available literature and reflects as to how successfully the country has implemented the new taxation, what has it experienced in its efforts in the replacement of sales tax and the fear relating to VAT that still remain unaddressed. It was found that the country has, as a whole, very successfully implemented the new taxation in terms of economic gains and costs to the government. Nonetheless, it is feared that the social aspects relating thereto are altogether ignored and thus this replacement is not socially optimal.

Suggested Citation

  • Zaman, Nadeem Uz & Ghutai, Gul & Zaidi, Syed Raza Irfan Shah, 2012. "The implication of the value added tax in Pakistan: administration, experiences and fears," MPRA Paper 37172, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:37172
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    References listed on IDEAS

    as
    1. John Piggott & John Whalley, 2001. "VAT Base Broadening, Self Supply, and the Informal Sector," American Economic Review, American Economic Association, vol. 91(4), pages 1084-1094, September.
    2. Keen, Michael & Lockwood, Ben, 2010. "The value added tax: Its causes and consequences," Journal of Development Economics, Elsevier, vol. 92(2), pages 138-151, July.
    3. Richard Bird & Pierre Gendron, 1998. "Dual VATs and Cross-Border Trade: Two Problems, One Solution?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 5(3), pages 429-442, July.
    4. Emran, M. Shahe & Stiglitz, Joseph E., 2005. "On selective indirect tax reform in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 599-623, April.
    5. Jorge Martinez-Vazquez & Andrey Timofeev, 2005. "Choosing between Centralized and Decentralized Models of Tax Administration (2005)," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0502, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Value Added Tax; Pakistan; experiences; fears; economic gains and costs; social cost;
    All these keywords.

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other
    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation

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