Globalization and its Impact on Taxation Structure of Pakistan

Abstract

Economic globalization has both negative and positive impact on the economy of Pakistan. In order to encourage free trade, tariffs were decreased under the framework of World Trade Organization (WTO) which had a negative impact on the tax structure of developing countries. For instance, in Pakistan, the decrease in tariff has been compensated with an increase in General Sales Tax (GST) and direct tax. Instead of compensating the decrease in tariff with GST and other taxes, Pakistan should improve its exports by enhancing the quality of its products, particularly textile. European Union has included Pakistan in the Generalized Scheme of Preferences Plus (GSP+), which may result in the betterment of the economy of Pakistan, good quality of products and increase in export and revenues. ______