Taxation in Pakistan

Taxation
An aspect of fiscal policy
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Pakistan's Current Taxation system is defined by Income Tax Ordinance 2001, promulgated on 13 September 2001, which became effective from 1 July 2002.

History

Income Tax Act of 1922

Income Tax Act of 1929: prevalent in the British Raj and was adopted by the Government of India as its Income Tax Law.

Income Tax Ordinance (1979)

The Income Tax Ordinance was the first law on Income Tax which was promulgated in Pakistan from 1 July 1979 by Government of Pakistan.

Income Tax Ordinance 2001

To update the tax laws and bring country's law in accordance with international standards, Income Tax Ordinance 2001 was promulgated on 13 September 2001, which became effective from 1 July 2002.

IT rules 2002

IT rules 2002 were promulgated by FBR on 1 July 2002 in exercise of powers granted under section 237 of the Ordinance.

Problems

Taxation in Pakistan is a complex system of more than 70 unique taxes administered by at least 37 agencies of the Government of Pakistan.^[1]

According to the International Development Committee, Pakistan had a lower-than-average tax take. Only 0.57% of Pakistanis, or 768,000 people out of a population of 190 million pay income tax.^[2]

Federal taxes

Federal taxes are administered by the Federal Board of Revenue.

Corruption

According to a 2002 study, 99% of 256 respondents reported facing corruption with regard to taxation. Furthermore, 32% of respondents reported paying bribes to have their tax assessment lowered, and nearly 14% reported receiving fictitious tax assessments until a bribe was paid.^[3]

Further reading

• Bahl, R., Wallace, S., & Cyan, M. (2008). Pakistan: Provincial government taxation (No. paper0807). International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.

References

Economy of Pakistan
History	Numbering system Five-Year Plans Nationalization Privatization Corporatization Fauji Foundation Islamic economization Economic liberalization Medium Term Development Framework Periods of stagflation
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Taxation	Federal Board of Revenue Tax on cash withdrawal
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Society	Billionaires Businesspeople Demographics Labour force (Child labour) Public holidays Urbanisation Pensions
Domestic economies	Azad Kashmir Balochistan FATA Gilgit-Baltistan Islamabad Khyber Pakhtunkhwa Punjab Faisalabad Lahore Rawalpindi Sindh (Karachi)
See also	Central business districts Foreign aid Foreign trade International ranking Investment in Pakistan Sister cities Provinces by GDP Pakistanis by net worth Politicians Standard of living
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