The Impact of the Reduced Sales Tax Burden Policy on Export-Oriented Sectors

On 31 December 2011, the Federal Board of Revenue introduced a tax policy to reduce the sales tax burden on five export-oriented sectors in Pakistan. This policy remained applicable until 30 June 2019. In this article, the author addresses the question of whether the reduced sales tax burden policy has had a significantly large impact on the exports of the five sectors during the period under study. The author also discusses the consequences of the reduced tax burden policy on Pakistan’s sales tax (VAT) system and economy.