IMPACT OF TAXATION ON ECONOMIC GROWTH OF PAKISTAN.Thesis Title

Abstract

Purpose: This research paper concluded with the objective of analyzing the Impact of taxes on Economic Growth of Pakistan. In this report we examined the Economic growth through Gross Domestic Product. We found negative effects of different taxation variables such as negative effects of Income Tax, negative effects of Sales Tax, negative effects of Corporate Tax, negative effects of Custom Duty and negative effects of Federal Excise Dutyon real GDP. Finally, we determined that the current level of taxation in Pakistan necessary to be revised carefully as this has negative effects on Economic Growth of Pakistan. Research Methodology: This research report is based on analyzing the impact of taxation on economic growth of Pakistan. Established on the research aim and objective, it was observed that quantitative research technique will be the most suitable for achieving the objectives and answering research questions. The regression model is used to critically examine the empirical results. Quantitative research technique enables in collecting a large amount of data in less time. In conducting a quantitative analysis of the data we used time series data from 1973 to 2017 for empirical analysis. Findings of the Research: In this research study linear regression technique is used to analyze the impact of each variable of Taxation on the GDP. The research aims to understand the impact of taxation on economic growth of Pakistan therefore, several hypothesis were created regarding each variable. Practical Implication In order to avoid negative impact of taxation which include all taxes on economy strong policy recommendations by increasing the tax base, increase the number of tax payers, effective collection of income tax amount, reducing misrepresentations and phasing out exemptions, reducing the submission costs and government’s administrative cost, are important to improve the tax system.