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

Author

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  • 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

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    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 9780521397421.
    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)

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    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.

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    More about this item

    Keywords

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

    JEL classification:

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

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