The implication of the value added tax in Pakistan: administration, experiences
and fears
Zaman, Nadeem Uz and Ghutai, Gul and Zaidi, Syed Raza Irfan Shah
Balochistan University of Information Technology, Engineering and Management Sciences, Quetta, Pakistan, Sardar Bahadur Khan Women University, Quetta, Pakistan
7 March 2012
Online at https://mpra.ub.uni-muenchen.de/37172/
MPRA Paper No. 37172, posted 07 Mar 2012 19:15 UTC
T h e i m p l i c a t i o n o f t h e v a l u e a d d e d t a x i n P a k i s t a n : d
n a s e c n e i r e p x e , n o i t a r t s i n i m d
a f e a r s
n a m a Z z U m e e d a
N 1 ,Gu lGhutai2 ,SyedRazaI franShahZaidi3
t c a rt s b A
t s ri f s ti e c n i
S impo is itoni nFrance,t hevalueadded t axa itonha sbecomes o n i T A V e v a h t o n s e o d t a h t tf e l y rt n u o c r e h t o o n s i e r e h t A S U t p e c x e t a h t r a l u p o p
h ti w x a t s e l a s s ti e c a l p e r o t n o it a g il b o l a n o it a n r e t n i s ti d e lli fl u f s a h n a t si k a P . e s u
. 0 1 0 2 r a e y e h t y b T A
V Thi spape rexamine stheavaliablel tieratureand r elfect s n
o it a x a t w e n e h t d e t n e m e l p m i s a h y rt n u o c e h t y ll u f s s e c c u s w o h o t s
a ,wha tha s
e c n e ir e p x e t
i d in ti seffotr sinther eplacemen tofs alest axand thefea rrela itng o
t VATthats tli lremainunaddressed . tI wasf oundt hatt hecoun rtyhas ,a sa c i m o n o c e f o s m r e t n i n o it a x a t w e n e h t d e t n e m e l p m i y ll u f s s e c c u s y r e v , e l o h w
s t s o c d n a s n i a
g tot hegovernment .Nonetheles ,si tsi f eared t hatt hes ocia l o
t e r e h t g n it a l e r s t c e p s
a areatlogether i gnored and thu sthi sreplacemen ti sno t y
ll a i c o
s op itmal .
; s d r o w y e
K VAT :Paksitan ;expeirence ;sf ears ;economicgain sandcosts;s ocia l t
s o c
1Asssitan tProfessor ,BalochsitanUniverstiyofI nforma itonTechnology ,Engineeirngand n
a t si k a P , a t t e u Q , s e c n e i c S t n e m e g a n a M
2Lecturer ,Sarda rBahadu rKhanWomenUniverstiy ,Quetta ,Paksitan
3Asssitan tProfesso,rBalochsitanUniverstiyofI nforma itonTechnology ,Engineeirngand n
a t si k a P , a t t e u Q , s e c n e i c S t n e m e g a n a M
2
.
1 I n rt o d u c it o n
n a t si k a
P ha sbeenu isngvalueaddedt axe s(VAT )ins omef ormor t heotheri n O T W h ti w s t n e m e e r g a e d a rt s ti l li fl u f o t r e d r o n i ,r e v e w o H . 7 4 9 1 e c n is y rt n u o c e h t
s n o it c e ri d e h t o t t s u j d a d n
a o fIMF,t hecoun rtyhasr eplaced ti sold s alest ax d
e d d a e u l a v e h t h ti w m e t s y
s taxa iton .Thechangehasr esutledi nsome
e h t t a t n e s n o c f o l e v e l h g i h a h ti w d e t n e m e l p m i t e y y m o n o c e e h t n i e c n a t si s e r
. d n e
e h T
? s e c n e ir e p x e e v it is o p n i s tl u s e r T A V e h t f o n o it a t n e m e l p m i e h t s e o D
v o r p m i l u f s s e c c u s e v a h o t d e tr o p e r n e e b s a h T A V f o n o it a t n e m e l p m
i e d the
t n u o c e h t r o f s e u n e v e
r ire sacros sthe wolrd i n mos to fthe cases ;ye tthere are s
t n e d i c n
i in some developing countire s tha t have shown faliure s in the f o n o it a t n e m e l p m i l u f s s e c c u s e h t t a h t d e v e il e b s u h t s i tI . T A V f o n o it a t n e m e l p m i
o t s e t a l e r y rt n u o c a n i T A
V the adminsi rta iton o fthe colleciton. Thi spape rthu s h
g u o r h t s e t a g it s e v n
i an overview o f the avaliable ltierature a s to how t
n e m n r e v o g e h t y ll u f s s e c c u
s o fPaksitanhasi mplemented t heVATi nthecoun rty o
i c o s s ti n
i -economic context .Therefore ,thi sstudy tire sto answe rthe following :s
n o it s e u q h c r a e s e R
.
1 Wha taret heexpe irence so fPaksitani n t hei mplementa itono fVAT? .
2 How successfully ha sthe governmen taddressed the sisue a ir isng i n the
? n o it a t n e m e l p m i .
3 Wha taret hef earsr ela itngt ot hei mplementa itono fVATi nPaksitan? .
4 Did the governmen t con isde r the canon s o f taxa iton in the
? T A V f o n o it a t n e m e l p m i . 1 .
1 Thevalueaddedt ax :methodsandconsequences
3 n
o it a x a
T , fel ta simpotrantf sica lnecesstiy ,allow sgovernment sto earn r evenues y
m o n o c e e h t n i s e c i v r e s d n a s d o o g f o n o it c u d o r p e h t m o
rf . T h vae lue added
s e x a
t (VAT )are indriec tm -ul itpoint ,mul it-stage tax that i slevied a tevery stage f
o the value addiiton in the produc iton proces s(Thacker ,2009 ;Parkins ,1996) . e h t f o e g a t s y r e v e t a s e s s e n is u b h g u o r h t s t n e m n r e v o g y b d e i v e l s i x a t s i h T
e t a m it l u e h t o t e c ir p s ti e s a e r c n i lli w t a h t t c u d o r p e h t f o t s o c e h t o t n o it i d d a
r e y u
b (ThomsonandSt irckland ,2001) .
si t c u d o r p a r o f y a p o t g n ill i w e r a s r e m o t s u c e h t e c ir p e h
T the value o fthe
t c u d o r
p (Thomson and St irckland ,2001) and i sshared between the produce r n
o it c u d o r p f o s r o t c a f r e h t o d n
a .Theword‘ value’ r eferst ot hedifferenceo fcos t .
c t e r o b a l d n a l a ir e t a m w a r e h t o t d e d d
a toproduces omegivenoutput .Thu ,si t o
t e l b is s o p s
i measure the added value in term so faddiiton to cost splu sthe s
ti f o r
p o rminu sthel os sand a sa resul tthe tax si l evied on thi saddi iton i n value . y
lt n e u q e s n o
C unilke the sale tax ,the impo is iton o fthe value added tax has i
e r o
m mpac ton the produciton deci isons r athe rthan the sale sdeci ison s(DCCI , .
) 8 0 0 2
Threemajor r eason saccount f o rtheneed to imposethe value added t ax ro ot ti
h ti w x a t e l a s e h t e c a l p e
r ;(1 )i ti sa reilable source o frevenues ,(2)ha sno y
r a n o it e r c si
d economic e ffect and (3 )i smore efifcien tand adminsi rtable than r
e h t
o form so ftaxe s(DCCI ,2008) .As ,the tax collec iton should be efifcien tand p
a e h
c (Ande tron ,2004) ,authoir ite sneed to use diverse methods ,regula itons r
o f s m e t s y s n o it c e ll o c d n
a an effecitve taxa iton system in the economy .
) 9 0 0 2 , r e k c a h T
( A sfa ra sthe value added tax i sconcerned ,there are fou r s
d o h t e
m in use fo rthe collection o f value added tax ;(1 )the addi itve driec t d
o h t e
m ,(2 )theaddiitvei ndriec tmethod, ( 3 )thesub rtac itvedriec tmethod and )
4
( the sub rtac itve i ndriec tmethod .Since tis f ris tsuccessfu limpo isiton i n France )
7 0 0 2 , d o o w k c o L d n a n e e K
( , VAT ha sbecome an i mpo tran tsource of r evenue r
o
f ove r145 countire sword ove rtha tgenerate ssomewha t25% (around 20%
4 )
r e h g i
h o fthe i ncome fo rcountire saround the wolrd (DCCI ,2008 ;Keen and 7
0 0 2 , d o o w k c o
L ) .
f o n o it a zi n r e d o m e h t d n a s e x a t d e d d a e u l a v e h t f o s s e c c u s e h t w e i v n i g n i p e e K
s e x a t e m o c n i g n i k a m n i s e it l u c if fi d e h t g n ir e d is n o c s a l l e w s a n o it a t n e m e l p m i s ti
r e d r o
b -adjustable, I MF and WTO have proposed tha tcount ires- especially the s
e n o g n i p o l e v e
d -should resor tto value added taxa iton (Nichoslon ,2010 ;Keen .
).
d . n , d e m h A ; 7 0 0 2 , d o o w k c o L d n
a In ilnewtih t hepropo isitonofI MF ,Paksitan si g
n o m a o sl
a thosecountire swhichare rtying t or eplacetheoldsalest axwtih t he )
T A V ( x a t d e d d a e u l a
v .Though t hevalueaddedt axi sexpectedt oi ncreaset he e
u n e v e
r f or a coun rty ,i ti simpotran ttha thow the governmen tmanage s ti s n
o n e d r u
b t hena itontha ti sarleadyf acingdfiifcul ite so fheavycos to filving.
e u l a v e h t h ti w s e x a t r e h t o e h t g n i c a l p e r f o s t n e m ir e p x e l u f s s e c c u s e h t e ti p s e D
e v it a g e n o t n i d e tl u s e r s a h n o it is o p m i e h t t a h t s tr o p e r o sl a e r a e r e h t , d e d d a
. s e ir t n u o c r o f s e c n e u q e s n o
c Thus ,Keen and Smtih (2006) have found ou ttha t y c n e i c if f e e h t d e c u d e r e v a h s e s a c e m o s n i s e x a t d e d d a e u l a v f o n o it is o p m i e h t
. m e t s y s n o it a x a t s
’ y rt n u o c e h t f
o In addi iton to thsi ,they have aslo suggested
” k c a tt a l a n i m ir c
“ o t e n o r p o sl a s i s e x a t d e d d a e u l a v f o n o it a t n e m e l p m i e h t t a h t
r o
f example carouse l rfaud etc .Moreover ,Desai and Hine s(2005 )hav e shown e
h t t a h
t impo is iton o fvalue added t axe shasr esutled i ntoa r educ iton o fexpotr s d
n
a na itona l output . Futrhermore , Piggot t and Whalley (2001) have aslo n i e s a e r c n i o t n i d e tl u s e r s a h s e x a t d e d d a e u l a v f o n o it is o p m i e h t t a h t d e t a c i d n i
t n e i c if f e n
i produc iton and thu sweflare l osses .Simlialry ,Keen (2006 )and Emran )
5 0 0 2 ( z ti l g it S d n
a have repotred VAT si i nfeiro rto ta irff sand resutlan lty mos to f d
e t c e ll o c s e x a t e h
t by the developing count ire srelate to the impotr sand thu s ir
a t s a t c
a f .sf
5 .
2 TheI mposi itonoft hevalueaddedt xa inPakistan 6
9 9 1 r a e y e h t y
B Paksitan had been u isng a very ilbera lsale stax l egi lsa iton tha t o
t d e t a rt si n i m d a s a
w phy isca lcon rto land documenta iton .Nonetheles ,s i n1996– t a h t n o it a ls i g e l x a t s e l a s e h t n i t u o b a t h g u o r b s a w e g n a h c c it s a r d a 7 9
y r o t u t a t s f o m a e t e r e h t r e d n u s n o it p m e x e s e l a s t n e r e ff i d d e t a r o p r o c n i
o t n i s t n e m t s u j d a l a r e v e s d e w o ll a e g n a h c s i h T . k r o w e m a
rf thet axsystem whereby
.s d l o h s e r h t t n e r e ff i d g n i x if y b y l g n i d r o c c a d e t a d o m m o c c a e r e w s e si r p r e t n e l l a m s
i ,s u h
T nPaksitandi ffe irngl evel soft hreshold sare ifxed f ort hecollecitono fvalue- a
m e h t y b n o ill i m 5 . 0 . s R o t g n i e b l e v e l r e w o l e h t h ti w x a t d e d d
a nufacturer sand
s r e li a t e r r e h tr u f n o ill i m 1 . s
R ;t hevalue-added t axbe2%wtihin t hi scategory . a t a x a t d e d d a e h t f o t n e m y a p n o ill i m 5 . s R n a h t r e h g i h s d l o h s e r h t r a f , s a e r e h W
. r e v o n r u t l a t o t e h t f o
% 5 1 f o e t a r
e u l a v m r o f n o it a rt si g e r e h
T -addedt axhasbeendonebyt hes alest axof ifce s x a t f o t n u o m a e h t e t a g it s e v n i o t s t n e m u c o d f o r e b m u n e g r a l a d e ri u q e r t a h t
s n r u t e r x a t e m o c n i ,r e b m u n x a t l a n o it a N e h t e d u l c n i s t n e m u c o d e s e h T . e l b a y a p
a i c r e m m o c e h t f o l i a t e d p i h s r e n w o e h t r o t n e r , s r a e y o w t t s a l e h t r o
f lpremsies ,
y r e n i h c a m d n a t n a l p , s e si m e r p e h t f o n o it c e p s n i l a c is y h p a s e d is e b s lli b y ti li t u
.) . d . n , d e m h A (
.
3 Theexpeirencesrelaitngt ot hei mplementaitonofVATi nPakistan e c n is n a t si k a P n i m e t s y s n o it a x a t e h t f o t r a p a n e e b s a h x a t d e d d a e u l a v e h T
7 4 9
1 in s omeway sort heother ,nonetheles ,st hegovernmen tha splannedt o e
u l a v e h t h ti w x a t s e l a s e h t e c a l p e
r -addedt axi n2010.I nordert odos o ,at alior- n
a t si k a P n i d e t n e m e l p m i n e e b s a h n g is e d x a t d e d d a e u l a v e d a
m whichha s
t s o c e h t n i ll a f a n i d e tl u s e
r o fcollecitonast hi snew t axbaseha sproved t obe e
c n a il p m o c e r o
m – oirented .Moreove,rt hsir eplacemen tha sprovidedt he n
o it a x a t e v is s e c x e t s n i a g a d r a u g e f a s a rt x e h ti w s e s s e n is u b l l a m
s (Ahmed ,n.d)..
6
x a t d e d d a e u l a v e h t f o n g is e d w e n e h t t a h t d e v e il e b y l n o m m o c s i ti h g u o h T
t n e m e c a l p e r e h t , y rt n u o c e h t f o s n o it i d n o c c i m o n o c e e h t si t s u j d n a y lt n e i c if f u s
. n g is e d w e n e h t f o n o it a t n e m e l p m i e h t n i o o t s m e l b o r p l a r e v e s o t n i d e tl u s e r s a h
c e s l a r e v e s ,t s ri f t
A iton soft hes erver s ecto rhaver emained ou toft henewvalue y
lt c e fr e p n e e b t o n l li t s s a h y rt n u o c e h t , y l d n o c e S . e g a r e v o c x a t d e d d a
n i l u f s s e c c u
s minimi izng thevalue-addedt axexemp iton sandbroadeningt he e
w o l d o o g a g n i x if f o s e u s si e h t o t e u d e s a b x a
t rt hreshold.Thridly,i tha s y
lt n e l u d u a rf o t y s a e e m o c e
b unde rwrongcategoires – inordert os olvet hi s r
o f s d l o h s e r h t t n e r e ff i d x if o t d e d i c e d s a h t n e m n r e v o g e h t , m e l b o r p
.
% 6 2 t u o b a f o s e u n e v e r e h t g n i c if ir c a s y b s r e li a t e r d n a s r e r u t c a f u n a m
e h t , y l h tr u o
F adminsi rta itonoft hevalue-addedt ex thasr esutled i ns ubstan ita l , d e m h A ( s r e y a p x a t e h t s d r a w o t n o it a rt si n i m d a e h t y b t n e m s s a r a h d n a s y a l e d
.) . d .
n Fitfhly,t hei mplementa iton oft hevalue-added t axha saslor esutledi n s i h t o t g n it a l e r e u s si t n a tr o p m i n A . s t n e m y a p d n u f e r f o a e r a e h t n i s m e l b o r p
e u l a v e h t e r e h w s e c r u o s e h t f o e n o y n a t a t a h t si m e l b o r
p -added t axe s
t a d e c it o n e r a s e c i o v n i e k a f , d e s o p m
i thei ntermediarymanufactuirngand e r a s r o s s e c o r p e t a i d e m r e t n i l a r e v e s ,s i h t o t n o it i d d a n I . s e it i v it c a g n is s e c o r p
d e zi n g o c e r n
u a sdifferents ector sarehighlyundocumented .Las lty,t henumbe r s
a l e h t n i y l b a r e d is n o c d e s a e r c n i s a h s d n u f e r x a t r o f sl a e d f
o tt woyear sand t he
e h t r o f g n o l o o t y ll a m r o n s i sl a e p p a e s o h t f o t n e m e lt t e s e h t n i d e v l o v n i e m it
, d e m h A ( s y a l e d e s o h t h ti w s e s a e r c n i s s e n is u b g n i o d f o t s o c r i e h t s a s r e y a p x a t
.) . d . n
s e u s si f o n i m d a e h t e v o r p m i o t s e r u s a e m e m o s d e t p o d a s a h t n e m r a g e h T
l e
r a itngt ot hei mpo is itonoft hevalueaddedt ax .Atf ris ,tt hegovernmen tha s e h t e d a m s a h s i h T . w e f a n o d e lt t e s d n a s d l o h s e r h t f o e g n a r e g r a l a d e c u d e r
e h t d n a t n e m n r e v o g e h t h t o b r o f y s a e s e x a t f o n o it a l u c l a c d n a n o it c e n n o c
e m m o c e h t , y l d n o c e S . s r e y a p x a
t nti s rtyingt ocompletelyautomatet he d n a n o it a rt si g e r n i d e v l o v n i n o it a t n e m u c o d e h t e c u d e r o t s s e c o r p n o it a rt si g e r
7
e h t r e v o c n u o t d e t c e p x e o sl a s i n o it a m o t u a s i h T . s d n u f e
r unrecognzied and
, y l d ri h T . s r o s s e c o r p d n a s r e r u t c a f u n a m e t a i d e m r e t n i d e t n e m u c o d n
u inordert o
,t n e m tr a p e d n o it a x a t e h t n i n o it p u rr o c e h t e c u d e
r thecommen tha scen rtalzied
n a , y l h tr u o F . d a b a m a ls I , w e i v e R f o d r a o B l a rt n e C e h t t a s s e c o r p n o it a rt si g e r e h t
k si r d e t a m o t u
a -basedr egsi rta itonmoduleha sbeenputi nprac itcet o e
r e h t e m o c r e v
o gsi rta itonproblem sandbroadent het axbase .Thegovernmen t d
n a d e if il p m is s a
h minimzied theproces sand r equriement so fdocumenta iton s
s e c o r p e h t n i y a l e d d e c u d e r n i d e tl u s e r s a h h c i h
w (Ahmed ,n.d. .)
.
4 Thef earsrelaitngt ot heimplementaiton T
A V f o n o it c u d o rt n i e h
T inPaksitan ,wtiheffec t rfomJuly01 ,2010,s tem sou to fti s e u l a v h ti w s e it u d s m o t s u c e c a l p e r o t s t n e m e e r g a e d a rt e e rf h ti w t n e m ti m m o c
.) 8 0 0 2 , g r e b m o o l B ( x a t d e d d
a Desptiet hef actt ha tPaksitanha sdiffeirng e
c i m o n o c e l a i c n i v o r
p ndowment sandt axpayingcapaci ites,t he
e h t f o s r o l o c e h t t c e lf e r o t d e s o p p u s e r a n a t si k a P n i s e x a t e h t f o n o it a t n e m e l p m i
s u o ir o t o n y d a e rl a s i n a t si k a P . s n a i c it il o p e h t y ll a i c e p s e y rt n u o c e h t f o s s a l c p o t
n a s e i c il o p x a t c i p o r h t n a li h p g n it n e m e l p m i t o n r o
f dt hena iton sinotoirousf ort ax
u h t , n o is r e v
a st henewplans f ort hei mpo is iton o fVATcallf or i n isghtsi ntot he n o it a t n e m e l p m i e h t n i s s e c c u s r o f s t e c a f c i m o n o c e d n a l a i c o s ,l a c ir o t si h
.) 0 1 0 2 , d o o s a M (
s e h t g n is u n e e b s a h n a t si k a P y ll a c ir o t si
H alest axmethod t ocollec ttisr evenue s e t a m it l u e h t n o l l e f s e x a t f o n e d r u b e h t f o t s o m y b e r e h w s r e m o t s u c e h t m o rf
n o it a lf n i h ti w d e t a l e rr o c e b o t d n u o f n e tf o s i x a t s e l a s e h t ,t l u s e r a s A . r e y u b
c e lf e r y l e t a m it l u s i h c i h w , x e d n i e c ir p r e m u s n o c d e s a e r c n i h g u o r h
t ted i nt he
d e t c e p x e s i T A V f o n o it is o p m i e h t , y r a rt n o c e h t n O . y rt n u o c e h t f o P D G l a n i m o n
a t a h t e si m o r p s e ir t n u o c r e h t o n i s t n e m ir e p x e e h t ,s u h T . e u s si s i h t e v l o s e r o t
e h t f o h t w o r g d e l n o it p m u s n o c o t d a e l l li w x a t s e l a s e h t m o rf T A V e h t o t h c ti w s
y m o n o c
e .Nonetheles ,si ns omecountire silkeFrance ,EUandSingaporehave
8
d n a d e v o r p m i g n is u x a t s e l a s e h t g n i m r o f e r y b d e t n e m ir e p x e y ll u f s s e c c u s o sl a
d a e t s n i n o it i d d a e u l a v f o d o h t e m c if it n e i c s e r o
m (Masood ,2010) .
t a h t d e t s e g g u s s a h ) 0 1 0 2 ( d o o s a M , n a t si k a P n i T A V f o n o it is o p m i e h t o t g n ir r e f e R
e v a h l li w n o it a l u p i n a m l a c si f d n a e r u tl u c l a c it il o p t p u rr o c y ll a c i m e d n e e h t
f o e c n e s e r p e h t n i t a h t s e u g r a e H . T A V f o n o it is o p m i e h t n o s n o it a c il p m i c it s a r d
it il o p t n e rr u c e h
t ca landeconomics etup,t hevalueadded t axwli lbecome d n a p x e l li w s i h T . n o it a lf n ir e p y h o t n i tl u s e r lli w s u h t d n a e r u t a n n i e v is s e r g e r e r o m
e h , s u h T . e v it i b i h o r p e m o c e b l li w I P C e h t s a y rt n u o c e h t n i y tr e v o p f o s t e k c o p e h t
o it is o p m i e h t t a h t d e t s e g g u s s a
h no fVATi nPaksitans hould onlybeused t o r o f d e e n e h t d e t a c i d n i o sl a s a h e H . s e x a t e h t e si a r d n a e s a b x a t e h t n e d a o r b
T A V t c e fr e p t n e m e l p m i y lr e p o r p o t e u n e v e R f o u a e r u B l a rt n e C e h t n i s m r o f e r
m r o f e r l a n o it a zi n a g r o , e si tr e p x e l a c i n h c e t f o s m r e t n i l e d o
m s ,TIprogramming
. y g o l o d o h t e m e v it c e ff e n a d n a
.
5 Thesrtengthsandweaknessesoft headminisrtaitono fVATi nPakistan e h t d e ll a c n o it a x a t d o o g f o a ir e ti r c e m o s d e n il t u o s a h y r o e h t c i m o n o c E
.) 4 0 0 2 , n o tr e d n A ( n o it a x a t f o s n o n n a
c These crtieira sugges ttha ta good tax i s n
o it c u d o r p t c e ff a y l e v it a g e n o t s a y v a e h t o
n (George ,2009) .Whenwecon isde r t
a h t s u o i v b o s i ti , n a t si k a P n i T A V f o n o it is o p m i e h t n o e r u t a r e ti l e h
t governmen t
o t o n d n a s e u n e v e r e h t n i e s a e r c n i e h t n o d e s u c o f s a
h n the effect son the
e h t r e h t e h w o t s a n o it a c i d n i o n s i e r e h t , r e v o e r o M . y rt n u o c e h t n i n o it c u d o r p
s e x a t e h t f o s n o it a c il p m i l a i c o s e h t o t d e e h y n a d i a p s a h t n e m n r e v o
g .
Thecanon soft axa iton sfu trhe rsuggestt ha ttaxe sshould be easyand cheap t o t
c e ll o
c and t hecosti n t he collec iton should ber ecovered rfomt heul itmatet ax s ti s e s o l x a t e h t , m e h t e d u l c n i t o n o d s e x a t e h t d n a h g i h s i t s o c e h t f I .r e y a p
s s e n e v it c e ff
e (George ,2009 .) Be isde sthsi ,good tax i seasliy measureable and n
o it i d d a n I . n i a tr e
c to thsi ,the amount , itme and place o fthe tax payment s s t n e m y a p f o s d o h t e m e h t d n a s r e y a p x a t e h t o t n w o n k d n a d e m ri f n o c e b t s u m
9
. ) 4 0 0 2 , n o tr e d n A ( d n a t s r e d n u o t e l p m is e b t s u
m Thecaseo fPaksitani n t hsis ense s
o p s
i i itve .The cos tto the tax paye rsi r educed i n term so fdocumenta iton and t
n e m y a
p by the government .Moreover ,the amoun to ftax payable i seasliy .
s r e y a p e h t o t n w o n k , e l b a e r u s a e m
e h t g n ir e d is n o c t a h t d e u g r a e v a h ) 7 0 0 2 ( l l e s e k i M d n a ) 9 0 0 2 ( r e k c a h T
, d lr o w e h t f o s tr a p t n e r e ff i d n i s e c n e ir e p x
e the succes so fVAT depend son the ,
e r o f e r e h T . s e c it c a r p d n a s e i c il o p n o it a t n a l p m
i the i mpilca iton so fValueadded
s e x a
t requrier eform sand i mprovements i n t he poilcies ,organzia itona ls rtuctures e
h t n i s m r o f e r s a l l e w s a s e c r u o s e r d n
a adminsi rta itve setup s (DCCI , 2008 ; 8
0 0 2 , t a g e s e
Y ) . According to Jantsche r (1990 ) colleciton o f a good value x
a t d e d d
a collec iton comprsie s severa l adminsi rta itve and insttiu itona l g
n i d u l c n i s t n e m e ri u q e
r the idenit ifca iton and regsi rta iton o f the taxpayers , , s t n e m y a p d n a g n ili f f o l o rt n o c , s t n e m e ri u q e r t n e m y a p d n a g n ili f , g n i c i o v n i
. s e it l a n e p d n a s ti d u a , s d n u f e
r We have seen tha tthe adminsi rta itve aspect so f a
f n i e r a n a t si k a P n i T A V f o n o it a t n e m e l p m i e h
t c tcommendable .
, n o it i d d a n
I Brid andGendron (2005 )andJantsche r(1990)haves uggested t ha t e h t f o s t c e ff e e h t d n a t s r e d n u o t d e e n e ri d a s i e r e h t d e s o p m i si T A V e h t e r o f e b
, s e s s e c o r p n o it c u d o r p e h t n o T A V e h t f o n o it is o p m
i thei mpilca itonr elated t o
l a ti p a c d n a d o o f e k il s m e ti f o s t n e m t a e rt e h t ,) e l p i c n ir p y a p o t y ti li b a e h t ( y ti u q e
s d o o
g and t heiden itifca itonandr egsi rta itonoft het axpayers .Con isdeirngt he o
i c o
s -economiccontex toft hepovetrys t irckencoun rtymen ,tii shighlypos isble c
e h t t a h
t urrenti mpo is itono fVATw llir esutli ncirmina laver isonoft axes .The d e r e d is n o c n e v e t o n r e h t a r d e r u s a e m t o n s i T A V f o n o it is o p m i e h t f o s s o l e r a fl e w
e h t , e r o m r e h tr u F . x a t s e l a s e h t g n i c a l p e r y b T A V f o n o it a t n e m e l p m i e h t n i
d e s u c o f y l n i a m s a h t n e m n r e v o
g ont her evenue sand atlogether i gnored ast o .
y rt n u o c e h t n i r o t c e s n o it c u d o r p e h t n o T A V f o t c e ff e e b l li w t a h w
0 1
e h t n o e r o m d e s u c o f s a h t n e m n r e v o g e h t t a h t s t c e lf e r e r u t c i p l l a r e v o e h t ,s u h T
d e r o n g i r e h t e g o tl a s a h d n a n a t si k a P n i T A V f o s t c e p s a c i m o n o c
e thes ocia l isde .
s e u n e v e r e h t n i e si r ll a r e v o e h t e s a e r c n i o t d e ir t t c a f n i s a h t n e m n r e v o g e h T
. s r e y a p x a t e h t n o n e d r u b e h t n i e si r e h t n a h t r e h t a
r Thu stii sconcluded t hatt he
y g o l o n i m r e t c i m o n o c e n i e v it is o p e r o m s i n a t si k a P n i T A V f o n o it a t n e m e l p m i
a
r ther t hanbenevolen to rnorma itve .Thu ,st hei mplanta itono fVATi s .
n a t si k a P n i s s e c c u s c i m o n o c e n a y l d e t b u o d n u
.
6 Conclusions e
u l a v e h
T -addedt axe sarei mpotrantmutlsitaget ooslt ha tareassociated wtih e u l a v e h T . s t n e m n r e v o g r o f s e u n e v e r e h t n i e si r d n a n o it a t n e m e l p m i l u f s s e c c u s
o t s e m o c t i n e h w s e x a t s e l a s e h t o t r o ir e p u s e b o t d e s o p p u s si n o it a x a t d e d d a
i d f o s e c n e ir e p x e e h t ,s s e l e h t e n o N . s e ir t n u o c g n o m a e d a
rt fferen tcountiress how
e h t n i n o it a x a t e h t f o n o it a rt si n i m d a e h t n o s t s e r T A V f o s s e c c u s e h t t a h t
f o s e l p i c n ir p e h t ,t c a f n I . n o it is o p si d l a i c o s d n a c i m o n o c e e h t ll e w s a y m o n o c e
T A V f o s s e c c u s e h t o t e c n a v e l e r e m e rt x e f o e r a n o it a x a t f o s n o n a
c -especiallya s
. x a t s e l a s f o t n e m e c a l p e r a
a d a h s a h d n a x a t d e d d a e u l a v e h t h ti w x a t s e l a s d l o e h t d e c a l p e r s a h n a t si k a P
e h t t a h t g n i y a s t u o h ti w s e o g t I .l u f s s e c c u s y l e v it a l e r h g u o h t e c n e ir e p x e d e x i m
n e b e h t ti o l p x e y ll u f o t e s a h p m r o f e r a g n i o g r e d n u l li t s n i y rt n u o
c efti soft heVAT .
e r a t n e m n r e v o g e h t f o n o it a t n e m e l p m i l u f s s e c c u s n i s tr o ff e e h t ,s s e l e h t e n o N
m u m i x a m t c e ll o c o t y l n o t o n g n i y rt n e e b s a h t n e m n r e v o g e h T . e l b a d n e m m o c
s a l l e w s a s r e y a p x a t e h t o t s t s o c e h t g n it s u j d a y l e v it is o p o sl a t u b s e u n e v e r
. n o it c e ll o c
t a h t s r a e f n i a tr e c e r a e r e h t , n a t si k a P n i T A V e h t f o s s e c c u s t n a v e l e r e h t e ti p s e D
e h t t a h t d e t c e p x e s i tI . y rt n u o c e h t f o o ir a n e c s c i m o n o c e e h t n i h ti w t l e f e r a
e h t f o n o it a t n e m e l p m i e h t n i d o o g c il b u p e h t e t a n i m o d l li w s t s e r e t n i l a c it il o p
ti , r e v o e r o M . T A
V i sasloexpectedt hat t hsir eplacemen tw llir esutli ni ncreased
1 1
f o s n e m o e h t m o rf g n ir e ff u s y d a e rl a e r a t a h t s r e y a p x a t e h t n o n e d r u b x a t
o s s a s e c if f o t n e m n r e v o g e h t n i n o it p u rr o c , m si r o rr e t ,t n e m y o l p m e n u , n o it a lf n i
h t d e t c e p x e o sl a s i ti , e r o m r e h tr u F . n
o att henewt axe swli ldsicouraget he e ti n if e d s u h t si t I .l i a t e r t a h t e t o m o r p t u b y m o n o c e e h t f o r o t c e s g n ir u t c a f u n a m
r e h t a r s n i a g c i m o n o c e n o e r o m d e s u c o f s a h n a t si k a P f o t n e m n r e v o g e h t t a h t
l a v e h t t n e m e l p m i o t r e d r o n i m e l b o r p d n a s e u s si l a i c o s e h t t a h
t ueaddedt axi n
. n a t si k a P
, t n e m n r e v o g e h t
; e v it is o p s i n a t si k a P n i T A V f o e c n e ir e p x e e h t tr o h s n I
e h t o t g n it a l e r s t c e p s a l a i c o s s a l l e w s a c i m o n o c e l a r e v e s s a h , s s e l e h t e n o n
. n a t si k a P n i s e x a t e h t f o n o it a t n e m e l p m i
2 1 .
7 References .
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