Tax Reforms in Pakistan Historic & Critical View Huzaima Bukhari & Ikramul Haq Tax Reforms in Pakistan Historic & Critical View Huzaima Bukhari and Ikramul Haq PAKISTAN INSTITUTE OF DEVELOPMENT ECONOMICS ISLAMABAD 2020 The views and thoughts expressed in this publication are those of authors and thus may not be considered as of the Pakistan Institute of Development Economics as publisher. This scholarly work has been published online by PIDE in good faith for the collective benefit of academia and policy circles. © Pakistan Institute of Development Economics, 2020. ISBN 978-969-461-147-1 Pakistan Institute of Development Economics Islamabad, Pakistan E-mail:
[email protected] Website: http://www.pide.org.pk Fax: +92-51-9248065 Dedicated to millions of Pakistanis who pay income tax at source, and may or may not be liable to tax under the law, yet are dubbed as “tax cheats” by the tax authorities, lenders, donors, media and many others! (v) Tax Reforms in Pakistan C O N T E N T S Dedication (iii) Forward (xiii) Preface (xvii) PART – I Issues Chapter I: Issues in tax system 1 Chapter II: Confiscatory taxation 21 Chapter III: Collection dilemma 27 Chapter IV: Overcoming fragmented tax system: need for National Tax Agency 33 Chapter V: Black economy, tax losses, new paradigm 39 PART – II Past Legacy & Current Challenges Chapter VI: Fiscal Management: issues & challenges 45 Chapter VII: Imprudent policies sans reforms 73 Chapter VIII: World Bank & tax reforms 89 Chapter IX: Lack of initiatives & innovations 103 Chapter X: Hideous legacy