Impact of Unemployment, Inflation and Investment on Tax Collection in Pakistan.

Abstract

Pakistan was one of the fastest growing countries of 1960-70s with high annual growth rates. However, the years after this era saw a sharp decline and the pattern continues till date. Despite an abundance of natural resources available, the country could not achieve ideal economic environment over the years. One of the biggest challenges Pakistan faces is generating enough revenue to meet the requirement of Government expenditure and to raise national welfare. The failure to achieve an efficient tax system is often credited to corruption, tax evasion and political instability in the country. Taxation is a source of government revenue in almost every country throughout the world, collected by mandatory charges on individuals or corporations. Its goal is to raise the necessary cash for the government to allow resource allocation, income redistribution, econornic. albitization, and the elimination of externalities. To put it another way, taxes are payments imposed by the government on its citizens to help fund its spending. It is the primary means of shifting funds from the private to the public sector. The endeavor of taxes is to create a welfare society by providing protection to lives, properties, human rights, and oath,.public services, etc. Taxes are levied on different rates which makes most taxpayers anxious to know about the tax rate on income when paying direct taxes. However, in recent times due to the advancement in technology it has become very easy to calculate one's own tax based on the level of income (Chaudhri, 1965).