Open AccessWho Bears the Burden of Federal Taxes in Pakistan?
Author(s) -
Muhammad Hussain Malik,
Najam-Us- Saqib
Publication year - 1985
Publication title -
pakistan development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.154
H-Index - 26
ISSN - 0030-9729
DOI - 10.30541/v24i3-4pp.497-509
Subject(s) - economics , consumption (sociology) , revenue , distribution (mathematics) , government (linguistics) , population , subsistence agriculture , government revenue , tax incidence , tax revenue , indirect tax , income distribution , demographic economics , public economics , tax reform , agriculture , geography , inequality , finance , mathematical analysis , social science , linguistics , philosophy , demography , mathematics , archaeology , sociology
The main objective of the tax system of a country is togenerate enough revenue for the government, and it is always desiredthat taxes should be such that there is less burden on the poor and moreon the rich. Such an attribute of the tax system becomes even moredesirable for a country like Pakistan where the present distribution ofresources is highly unequal and a large proportion of the population isliving at the subsistence level. As in many other developing countries,in Pakistan also indirect taxes dominate in terms of their contributionto total tax revenue. It is argued that indirect taxes arc generallyregressive since they arc levied on consumption, and people in thelower-income classes devote relatively greater proportion of theirincomes to consumption. In this study, we have tried to estimate theincidence of the federal taxes on households in different income groups.We accomplished this by calculating effective tax rates (percentage ofincome contributed to taxes) for them.