Taxation In Pakistan Literature Review

LITERATURE REVIEW

Entire world must be taxed, the tax may start charged after interval period on property and person Ceaser Augustus (44bc) .The practice of taxation can also be witnessed in early European states as well as the monarch being the receiver of taxes. Taxes were charged on both moveable and immoveable property across the world from the early 15th century.

The system of taxation in India in great detail. Most of the taxes of Ancient India were highly productive. The combination of direct taxes with indirect Taxes secured elasticity in the tax system, while more emphasis was placed on direct tax. The tax-structure was a broad based one and covered most people within its fold. The taxes were diverse and the large variety of

The target of tax administration to collect only fair taxes.Other cost of taxation must not be collected from tax payers. Alain Zenner, Government Commissioner of Belgium Taxation (2000)

The ground realities which represent picture of our tax system in Pakistan. Our tax system is not tax payer friendly and tax payer faces hurdle in paying taxes. Tax Payer in Pakistan faces frequent legal and administrative changes in system and unawareness of such changes as one big hurdle in the way of efficient revenue collection. There is no coordination between tax policy changes and administrative framework. Shahid Hussain, Chairman Task Force Tax Administration (2000).

Adam Smith contribution in canons of taxation is consider as classic. The study of Adam Smith express that focus of every state must be to add towards the support of the government in proportion which return in context of their abilities that is revenue and it is only possible if state is present there. Here the word canon based on equality and justice, it means that every tax payer cannot pay equal taxes but in proportion. Proportion means according to his ability to pay whereas progressive taxation is that higher the income then higher the

Second one is flexibility which means that tax system must be flexible and not rigid and can be quickly adjusted according to the need of time. Third is simplicity which means that system should be plain and intelligible to the common understanding. Fourth one is diversity which very important factor which describes that variety of taxes not a single or few taxes. Variety of taxes means one form and other form and not net collection in one head to avoid inconvenience.

It is important to know which group or groups of tax payers should be taxed heavily so to reduce the aggregate demand of an inflationary economy. Savings is one of the important factor which absorbs existing purchasing power and withdrawn consumption and investment. In Pakistan there are different savings packages from commercial banks as well as Pakistan Investment bonds for worthy individuals, corporations. However due to parallel economy of Pakistan it is not that fruitful most of the