IMPACT OF INFLATION ON TAXES IN PAKISTAN: AN EMPIRICAL STUDY OF 2000-2010 PERIOD
Download| Volume 8 Issue 2 2012 | |
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| Author(s): |
Abdul Qadir Patoli
Tayyab Zarif
Nadeem A. Syed
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| Abstract | This study aims to examine the relationship between tax revenue and inflation in Pakistan. It is further measuring the rate of change in a stochastic variable of the taxes, i.e. direct, indirect, and total taxes, with a unit change in inflation in Pakistan with an assumption of other factors remaining constant. For this research secondary data for 2000 - 2010 was used. The relationship among the variables is examined at the annual effect of the same period. The analysis is followed by some statistical tools like correlation, regression, and significance test for error factor to test the hypothesis and infer some conclusion. The findings of the study suggest that inflation and taxes are positively correlated and any change in inflation causes taxes to increase in Pakistan. The inflation in the country explains the behavior of taxes positively, but less than This study can guide the fiscal policy planners to look at this critical position of taxes which are inflation-oriented, rather than production or investment-oriented. This study also proposes the further study of the relationships of taxes with change in investments and production within the country and also for all fiscal variables in compliance with the change in inflation. Research limitations-The results are based on secondary data, so the reliability is subject to the accuracy of the source. It also encounters the impact of inflation on taxes, which is not only the factor, so the results are based on assumption that other factors are held constant. |
| Keywords | Inflation, Direct taxes, Indirect taxes, Total taxes |
| Year | 2012 |
| Volume | 8 |
| Issue | 2 |
| Type | Short Report |
| Recognized by | Higher Education Commission of Pakistan, HEC | Category | "Y" | Journal Name | IBT Journal of Business Studies | Publisher Name | ILMA University | Jel Classification | - | DOI | http://dx.doi.org/10.46745/ilma.jbs.2012.08.02.04 | ISSN no (E, Electronic) | 2409-6520 | ISSN no (P, Print) | 2416-8393 | Country | Pakistan | City | Karachi | Institution Type | University | Journal Type | Open Access | Manuscript Processing | Blind Peer Reviewed | Format | Paper Link | http://ibtjbs.ilmauniversity.edu.pk/journal/jbs/8.2/4.pdf | Page | 31-41 |