Energy and Tax Reforms: Firm-level Analysis from Pakistan (W - 146)

Energy and Tax Reforms: Firm-level Analysis from Pakistan (W - 146)

Publication details

  • Friday | 05 Sep, 2014
  • Vaqar Ahmed, Muhammad Adnan
  • Working Papers
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Dr. Vaqar Ahmed and Muhammad Adnan

Abstract

This paper captures the business community’s perceptions about key economic reforms particularly in the context of taxation and energy sectors. The main objective of the survey exercise is to gauge the firm-level business appetite for reforms and the type of reform effort they would be willing to support. The survey reached out to 300 firms. These include both formal and informal sector entities across the country. The timing of this survey is important as it was carried out immediately after the 2013 elections. This exercise, therefore, provides a good benchmark against which the people’s expectations from the government can be traced as the tenure proceeds. The key findings suggest that trust deficit continues to be a primary reason as to why people evade taxes. The government at the highest level needs to demonstrate fiscal responsibility and accountability which, in turn, will persuade the taxpayers to register and fulfill their liabilities. On energy reforms, the business community was in favour of revising power tariffs to cover full economic cost of generation, transmission and distribution. However, in return, they demanded load-shedding to be gradually eliminated (particularly daytime outages) and load-shedding to be scheduled and announced in time.