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| LTU-isation of the Tax System – Where Are the Songs of Spring? Case of the Large Taxpayers’ Unit (LTU) Islamabad, Pakistan |
| Muhammad Ashfaq Ahmed* |
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| Pakistan tax system reforms carried out during 2001-2010, were expensive, overwhelming and a failure. The reforms were financially afforded and technically assisted by the World Bank. While both Government of Pakistan (GoP) and the World Bank agreed on the failure of the tax reforms, they counter-blamed each other for the failure. A consensus, however, exists that the reform programme left the tax system more gridlocked, retrofitted, and incapacitated than before. The paper adopting the case-study approach explores the factors that led to the failure of the tax reforms. The theoretical premise developed is that as soon the vital drivers of the reform process, namely, political ownership and donor oversight, were dropped from the equation, it caused massive resource constraints on various reform strands that were still a work-in-progress varyingly distanced from the finish line. The paper spatially anchors the theoretical proposition in the Large Taxpayers’ Unit (LTU), Islamabad, Pakistan to generate micro-level empirics to feed them into the macro picture of the reform programme to sharpen and galvanise holistic understanding, and see the failure in a different and more realistic light. The results acquired are suggestively extrapolatable to most similarly-circumstanced developing countries and their rigidly underperforming tax systems.
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Dr Muhammad Ashfaq Ahmed is a senior Inland Revenue Service (IRS)-Pakistan officer, currently posted as Commissioner IRS, Large Taxpayers’ Unit (LTU), Islamabad, Pakistan. He has a doctorate in Political Economy.
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