Working Paper 229
This paper analyses Pakistan’s adoption of international tax standards within the broader context of its political economy and tax policy landscape. The study is part of a comparative research project implemented by the International Centre for Tax and Development (ICTD) – ‘Comparative Perspectives on International Tax from the Global South’. Significant reforms have been introduced under global frameworks, such as the Organisation for Economic Co-operation and Development (OECD)/G20 BEPS Action Plan and Common Reporting Standards (CRS); however, given Pakistan’s political and economic ecosystem, integrating these reforms into the country’s domestic fiscal policies remains challenging.
This study focuses on four key aspects of these reforms – tax treaties, transfer pricing, exchange of information, and taxation of the digital economy. It identifies the growing presence of multinational enterprises (MNEs), international pressure for increased transparency, and increased efforts to mitigate offshore tax evasion as key drivers of reform adoption. The study finds that, while overall transparency and compliance in the fiscal landscape have improved since these reforms were adopted, limited enforcement capacity and a fragmented tax system continue to cause inefficiencies.
The paper advocates a tailored approach, emphasising local capacity-building in tax administrations, institutional reforms, and multilateral cooperation. This will increase alignment between global tax standards and Pakistan’s economic and administrative realities, ensuring a sustainable and equitable tax system.
