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Critical Analysis of Revenue Generation of Azad Jammu and Kashmir: Challenges and Way Forward

Author

Listed:
  • Hina Altaf

    (Tsinghua University, Beijing)

  • Qurat Al Ain Shabir

    (Punjab University, Lahore)

Abstract

This paper provides a critical assessment of AJK's revenue generation, identifies the obstacles, and offers a solution for future sustainable economic growth and development in Azad Kashmir. The study uses a mixed-method approach that includes case studies, interviews with key stakeholders, and a review of the literature. Two important sectors i.e., the Power development organization and the Inland Revenue Department with the potential to generate considerable amounts of revenue are acknowledged and evaluated as case studies by the critical examination of AJK's revenue generation. According to the conclusions of this investigation, AJK confronts difficulty in expanding its revenue sources outside conventional sectors such as agriculture and tourism. According to the analysis, AJK has a limited tax base and a poor tax-to-GDP ratio when compared to international standards. Infrastructural restrictions were also noted as a significant challenge to revenue generation in AJK. The region confronts constraints in utilizing its hydropower capacity, which can influence economic activity and revenue production possibilities. With its attractive landscapes, historical sites, and cultural legacy, AJK has tremendous tourism potential. However, due to limited infrastructure, a lack of promotion and marketing activities, and security concerns, the region faces obstacles in fully realizing this potential. The thesis makes many policy solutions to solve these issues, such as boosting access to finance, fostering public-private partnerships, and tackling instability due to the Kashmir Issue. To promote sustainability and equitable growth, the thesis also underlines the value of incorporating local people in the revenue creation process. Overall, this individual research paper will help understand the dynamics of revenue generation and can help Azad Kashmir formulate policies on taxation, investment, trade, and other economic activity. Policymakers can analyze the performance of existing policies, identify areas for improvement, and establish evidence-based policies to increase income creation in the region by analyzing revenue data. This can lead to improved policy results and more informed decision-making.

Suggested Citation

  • Hina Altaf & Qurat Al Ain Shabir, 2024. "Critical Analysis of Revenue Generation of Azad Jammu and Kashmir: Challenges and Way Forward," Bulletin of Business and Economics (BBE), Research Foundation for Humanity (RFH), vol. 13(1), pages 920-929.
    • Handle: RePEc:rfh:bbejor:v:13:y:2024:i:1:p:920-929
    DOI: https://doi.org/10.61506/01.00369
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    References listed on IDEAS

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    2. David Amaglobeli & Laura Jaramillo & Pooja Karnane & Ms. Aleksandra Zdzienicka, 2019. "Tax Reforms and Fiscal Shock Smoothing," IMF Working Papers 2019/113, International Monetary Fund.
    3. Suhrab Khan & Ihtsham ul Haq Padda, 2021. "The Impact of Fiscal Policy on Income Inequality: A Case Study of Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 26(1), pages 57-84, Jan-June.
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    7. Apeti, Ablam Estel & Edoh, Eyah Denise, 2023. "Tax revenue and mobile money in developing countries," Journal of Development Economics, Elsevier, vol. 161(C).
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