• Taimur Chambers Plot # 10-D (WEST), Fazal-ul-Haq Rd, Islamabad
  • (+92) 51-2278134, (+92) 51-2278135
  • Taimur Chambers Plot # 10-D (WEST), Fazal-ul-Haq Rd, Islamabad
  • (+92) 51-2278134, (+92) 51-2278135

Research Programme

Research Programme

Provincial Taxation Reforms in Pakistan

Partners: Center for International Private Enterprise (CIPE)

Duration: January 2016, to July 2016

Locale: Islamabad, Karachi, Lahore 

Objective:

SDPI is currently conducting brief situational analyses on the provincial tax reform efforts in Punjab and Sindh. In order to take stock of the current fiscal efforts it is important to listen to the views of revenue authorities, business community, consumer groups and trade associations. It is also important to discuss how coordination can be improved between provinces and the center for reducing transactions and compliance costs faced by tax payers

Concept:

The provincial administrations have been entrusted with greater revenue mobilization responsibilities in a post‐18th Amendment milieu. Apart from the traditional taxes under provincial jurisdiction (e.g. property, transport and agriculture taxes), the sales tax on services is also under the provincial domain. Some provinces have also requested to devolve the control over federal excise collections.

As provinces gear up to achieve greater control over resource mobilization, there are issues related to double taxation (at federal and provincial stages), lack of census of agricultural and property incomes, missing data on services sector establishments and their turnover. Key reasons for these issues are:  a) fragmented structure of revenue mobilization at provincial level and b) weak capacity to plan forecast and audit the incomes base under provincial jurisdiction.

The provincial governments in Punjab and Sindh have undertaken a medium term exercise towards provincial revenue mobilization reforms. While both provinces are at different stages in the reform process, there are however learnings which can be shared from both ongoing exercises.

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