Abasyn Journal of Social Sciences. Special Issue: AiCTBM 2016

Buoyancy, Elasticity and Stability of Total Tax Revenues: Evidence from Pakistan

Nasser Shahzada, Muhammad Siddique, Kiran Mustafa, Altaf Hussain, Mazhar Ali Abbasi

Lecturer of Economics at Government Postgraduate college No.01 Abbottabad,
Associate of Economics at Government Postgraduate College No.01 Abbottabad,
Lecturer, Department of Economics Abbottabad University of Science and Technology,Abbottabad,
Assistant Professor Economics, Islamia College University Peshawar, Pakistan
M.Phil Scholar (Economics), Hazara University Mansehra, Pakistan.


This study intends to investigate the long and short run buoyancy and elasticity of total taxrevenues and also evaluated the stability of TTR in Pakistan using Time Series Data for theperiod 1979-2015. The study employs Engel-Granger Test and Error Correction Mechanismto calculate the long and short run buoyancies and elasticity. The long run buoyancy for totaltax revenue is 0.984 and short run buoyancy for total tax revenue is 0.973 which showed anon-buoyant and inelastic and inefficient tax system in short as well as in long run. The longrun elasticity is 0.994 which is also less than unity. The long run elasticity of total taxrevenues is greater than long run buoyancy showing that reforms are absolutely not workingin raising revenue even the tax reforms have negative impact on the tax. Base to GDPbuoyancy (1.017) is greater than tax to base buoyancy (0.967) reveals that along withincrease in GDP base is increasing but tax revenue is not increasing.
Keywords: Elasticity, Total Tax Revenues, Co-integration, Error Correction Mechanism,Pakistan.


Received Revised


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