Abstract:
The research paper is highlighting the difference between two concepts of evasion of
tax and avoidance of tax. Both of the concepts exist in the taxation system of the
whole world, but there is a thin line between these actions. The difference is discussed
in detail, also the avoidance of tax is affecting the country of Pakistan to the same
extent as the evasion does or not. In the following research project the main focus is
on the tax avoidance in Pakistan, along with its causes and effects on the country. The
research project also focuses on the matter of its legality, which is further explained
with the help of the provisions enacted by the Parliament in the statutes related to
taxation. The following research paper also differentiates between the other terms and
concepts related to taxation system for instance the tax mitigation. A comparative
study of Pakistan with other countries and how the taxation system can become
efficient in the country is been discussed. Hence there is a border line between the
evasion and avoidance and it is proved within the research paper that tax avoidance
has almost the same impact as of the evasion.
