2023

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Browsing 2023 by Author "Farhan Ali"

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    The loopholes in implementation of income tax laws in pakistan a roadmap from tax evasion to tax compliance
    (UMT.Lahore, 2023) Farhan Ali; Fatima Shoaib; Muhammad Umer Abdullah
    The issue of tax evasion is as old as tax itself. This study examines tax evasion, loopholes in its implementation and in particular the rising issue of tax compliance in Pakistan that has direct impact on revenue generation for the Tax authorities and Government. The objective of this research is to understand major determinants which influence tax evasion and the roadmap towards Tax compliance. This research provides a framework to understand the impact of Moral, socio-economic, behavioral, institutional and political aspects that leads to evading taxes. The study has in depth understanding of the loopholes in the legal system and the factors contributing to tax evasion in Pakistan and a cross regional contrast of tax system which identifies the issues in our Tax system, the process of collection and extreme legislation. All these factors contribute to tax evasion whereby elite class steals the tax and in the result the middle/lower class pays the price. The measures that may help tax authorities to encourage tax compliance in Pakistan, have also been highlighted in the last part of this thesis. The study concludes that the corruption, low Income level, Services income, self-employment, High income level, Marginal Tax Rate, Public Trust in Politician, Immense law making, complex tax system and Rule of law are negatively associated with tax compliance. The study also shows the roadmap from tax evasion to tax compliance by giving multiple recommendations. This study concludes that economic, moral and institutional factor is more strong determinants of tax evasion rather than demographic factors. Key words Tax Evasion, Tax compliance, transparency of Policy, Complex legislation, Rule of law, Massive tax, Low tax collecting Ratio, Tax Gap, Deterrence, fiscal policies, debts.