IDEAS home Printed from https://ideas.repec.org/a/lje/journl/v15y2010ispp139-169.html
   My bibliography  Save this article

Why is it so Difficult to Implement a GST in Pakistan?

Author

Listed:
  • Ehtisham Ahmad

    (Center for Development Research, University of Bonn, and Asia Research Centre, London School of Economics.)

Abstract

This paper discusses the efforts by the Government of Pakistan to implement a General Sales Tax (GST). First, a history of Pakistani tax reform efforts is presented along with the reforms recommended by the National Taxation Reforms Commission. After this, the design and implementation of the GST is discussed followed by an analysis of the political economy and provincial issues that arise in the process of implementing the GST. Finally, the paper discusses various proposals regarding the determination of the base for the GST. The paper concludes that the splitting of the GST by sectors, given the perspective that the 1930’s style sales tax, is not sensible, and the Pakistani formulation is more unstable than the assignment of the GST on goods.

Suggested Citation

  • Ehtisham Ahmad, 2010. "Why is it so Difficult to Implement a GST in Pakistan?," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 15(Special E), pages 139-169, September.
    • Handle: RePEc:lje:journl:v:15:y:2010:i:sp:p:139-169
    as

    Download full text from publisher

    File URL: http://121.52.153.179/JOURNAL/LJE%2015,%20SE/07%20Ehtisham%20Ahmad%20EDITED%20TTC%2011-10-10.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Ehtisham Ahmad & Abdulrazak Al Faris (ed.), 2010. "Fiscal Reforms in the Middle East," Books, Edward Elgar Publishing, number 13856.
    2. Jorge Martinez-Vazquez & Kaspar Richter, 2009. "Pakistan Tax Policy Report: Tapping Tax Bases for Development," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0908, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    3. Ahmad,Etisham & Stern,Nicholas, 1991. "The Theory and Practice of Tax Reform in Developing Countries," Cambridge Books, Cambridge University Press, number 9780521265638, October.
    4. Robina Ather Ahmed & Mark Rider, 2008. "Pakistan’s Tax Gap: Estimates By Tax Calculation and Methodology," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0811, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    5. Roy Bahl & Sally Wallace & Musharraf Cyan, 2008. "Pakistan: Provincial Government Taxation," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0807, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    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. Muhammad Atif & Dr. Naila Nazir, 2023. "Impact of Fiscal Decentralization on Services Tax Collection in Khyber Pakhtunkhwa," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 9(2), pages 701-708.
    2. Vito Tanzi, 2010. "Revenue Sharing Arrangements: Options and Relative Merits (The Mahbub ul Haq Memorial Lecture)," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 49(4), pages 311-332.

    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. Ahmad, Ehtisham, 2010. "Why is it so difficult to implement a GST in Pakistan?," LSE Research Online Documents on Economics 36379, London School of Economics and Political Science, LSE Library.
    2. Admad, Ehtisham, 2010. "The political-economy of tax reforms in Pakistan: the ongoing saga of the GST," LSE Research Online Documents on Economics 38361, London School of Economics and Political Science, LSE Library.
    3. Ahmad, Ehtisham, 2010. "The political-economy of tax reforms in Pakistan: the ongoing saga of the GST," Discussion Papers 95948, University of Bonn, Center for Development Research (ZEF).
    4. 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.
    5. Andrew Feltenstein & Musharraf Cyan, 2012. "A Computational General Equilibrium Approach to Sectoral Analysis for Tax Potential: An Application to Pakistan," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1226, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    6. Muhammad Ashfaq Ahmed, 2018. "Pakistan: wither tax reforms — the case of large taxpayers’ unit, Islamabad," Journal of Tax Reform, Graduate School of Economics and Management, Ural Federal University, vol. 4(3), pages 202-222.
    7. Sharma, Chanchal Kumar, 2004. "Implementing VAT in India :Implications for Federal Polity," MPRA Paper 206, University Library of Munich, Germany, revised 25 Feb 2005.
    8. Coady, David P. & Grosh, Margaret & Hoddinott, John, 2002. "Targeting outcomes redux," FCND briefs 144, International Food Policy Research Institute (IFPRI).
    9. Jean-Yves Duclos & Paul Makdissi & Quentin Wodon, 2008. "Socially Improving Tax Reforms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1505-1537, November.
    10. World Bank, 2010. "Mauritania - Policy Options to Enhance Private Sector Development : Country Economic Memorandum," World Bank Publications - Reports 2858, The World Bank Group.
    11. Céline DE QUATREBARBES & Luc SAVARD & Dorothée BOCCANFUSO, 2011. "Can the removal of VAT Exemptions support the Poor? The Case of Niger," Working Papers 201106, CERDI.
    12. Sajal Lahiri & Anjum Nasim, 2005. "Commercial Policy Reform in Pakistan: Opening up the Economy under Revenue Constraints," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 12(6), pages 723-739, November.
    13. Garcia Penalosa, Cecilia & Turnovsky, Stephen J., 2005. "Second-best optimal taxation of capital and labor in a developing economy," Journal of Public Economics, Elsevier, vol. 89(5-6), pages 1045-1074, June.
    14. Sami Bibi, 2001. "Comparing Effects of General Subsidies and Targeted Transfers on Poverty: Robustness Analysis Using Data Set from Tunisia," Working Papers 0125, Economic Research Forum, revised 09 Jun 2001.
    15. Neba Bhalla & Rakesh Kumar Sharma & Inderjit Kaur, 2023. "Effect of Goods and Service Tax System on Business Performance of Micro, Small and Medium Enterprises," SAGE Open, , vol. 13(2), pages 21582440231, June.
    16. Dagney Faulk & Jorge Martinez-Vazquez & Sally Wallace, 2007. "Using Human-Capital Theory to Establish a Potential-Income Tax," FinanzArchiv: Public Finance Analysis, Mohr Siebeck, Tübingen, vol. 63(3), pages 415-435, September.
    17. M. Govinda Rao & R. Kavita Rao, 2005. "Trends and Issues in Tax Policy and Reform in India," India Policy Forum, Global Economy and Development Program, The Brookings Institution, vol. 2(1), pages 55-122.
    18. Jaime Sempere, 2000. "Optimal Tax Rules, Pigou Taxation, and the “Double Dividend”," Economía Mexicana NUEVA ÉPOCA, CIDE, División de Economía, vol. 0(1), pages 93-103, January-J.
    19. United Cities and Local Governments, 2011. "Local Government Finance," Books, Edward Elgar Publishing, number 14696.
    20. Paolo Liberati, 2000. "Did VAT change redistribute purchasing power in Italy?," Working Papers in Public Economics 40, University of Rome La Sapienza, Department of Economics and Law.

    More about this item

    Keywords

    Tax; reforms; GST; Pakistan.;
    All these keywords.

    JEL classification:

    • H29 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other

    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:lje:journl:v:15:y:2010:i:sp:p:139-169. 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: Shahid Salahuddin (email available below). General contact details of provider: https://edirc.repec.org/data/lsecopk.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.