Tax Relief for Manufacturing and Services Sectors Aid Economic Recovery from Covid-19 in Pakistan
report
posted on 2024-10-04, 13:48authored bySaira Ahmed, Vaqar Ahmed
In response to the Covid-19 crisis, national and
sub-national governments enacted tax relief
measures for individuals and businesses. As a result,
the federal government is eager to learn how
tax policy and administration can aid pandemic
recovery efforts.
Weak economic growth and low tax revenues
made it difficult for the government to maintain
social protection measures during the Covid-19
pandemic. While micro, small, and medium-sized
enterprises (MSMEs) received some tax relief in
FY20, continued assistance is vital amid the ongoingglobal health emergency, which would likely
increase government borrowing requirements.
Furthermore, the government sought to improve tax
relief to ensure that only the most vulnerable receive
exemptions and subsidies.
With Pakistan subject to an International Monetary
Fund programme, implementing any tax relief
is challenging. Thus, tax relief options must ease
the financial shocks experienced by individual
taxpayers, small and medium-sized businesses,
and trading companies while minimizing the
government's revenue loss.
Funding
Default funder
History
Publisher
Partnership for Economic Policy (PEP)
Citation
Ahmed, S. and Ahmed, V. (2023) 'Tax Relief for Manufacturing and Services Sectors Aid Economic Recovery from Covid-19 in Pakistan', PEP Policy Brief, 251, Nairobi: Partnership for Economic Policy (PEP)