Research on Tax System in Pakistan

Income Tax in Pakistan

On creation of Pakistan, along with otherwise laws in force, we inherited Income Tax Act 1922, which govern the bother and collection of taxes in the country. Since 1922, the Income Tax Act had been a regular flux of change. Over the long period of time, this act had live on so complicated with the ever-burdening amendments from year to year that there was a crying need for a change. The Central Board of tax was created on April 01, 1924 through the Central Board of tax income Act, 1924. In 1944, a estimable-fledged Revenue Division was created under the Ministry of finance. later independence, this arrangement continued up to 31st August 1960 when on the recommendations of the Administrative Re-organization Committee, CBR was made an attached department of the Ministry of Finance. In 1974, further changes were made to streamline the organization and its functions. Consequently, the post of president CBR was created with the status of ex-officio Additional Secretary and Secretary Finance was relieved of his duties were as ex-officio Chairman of the Central Board of Revenue.




In order to remove impediments in the exercise of administrative powers of a Secretary to the Government and effective formulation and implementation of financial policy measures, it was decided to restore the status of the CBR as a Division under the Ministry of Finance. Thus, Revenue Division was create on October 22, 1991. This experiment continued for a short period. In January 1995, Revenue Division was abolished and CBR reverted back to the pre-1991 position. However, from December 01, 1998, Revenue Division was once again re-created and it continues to exist as such.

Direct Taxes primarily comprise of Income tax. Wealth tax was abolished in year 2002 as a demand of business loss, on the plea that this tax was discouraging investment in business. For the intent of the charge of tax and the computation of total income, all incomes be classified as:

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