The 1994 reforms in China were remarkably successful in stabilizing the economy and raising reven... more The 1994 reforms in China were remarkably successful in stabilizing the economy and raising revenues for the benefit of sustainable growth and permitting the central government to redistribute resources to poorer regions through an equalization framework. However, the rise of informal local borrowing in the absence of effective own-source revenues raises possible risks and imbalances in the future. There is thus a need to reconsider the fundamentals of intergovernmental fiscal relations, building on the basis laid in the 1994 reforms.
This paper extends a discussion of the investment cycle in another G-24 paper (Ahmad, 2017), in w... more This paper extends a discussion of the investment cycle in another G-24 paper (Ahmad, 2017), in which the questions concerning “what” to invest in and “where” are addressed. This paper examines the “how” of investment for sustainable development, focusing on options for contracting arrangements, such as PPPs, that would help to involve the private sector, manage risks in the presence of asymmetric information, as well as uncertainty about climate change. It also addresses the strengthening of national and local institutions and the possible role of international financial institutions. In discussing the investment options, the paper also updates an earlier G-24 review of the empirical and theoretical literature on involving the private sector involvement in public investments (Ahmad, Bhattacharya, Vinella, and Xiao, G-24 2015). Contracting Arrangements and PPPs for Sustainable Development Working Paper commissioned by the G-24 as part of its work program on financing for development
This paper discusses the efforts by the Government of Pakistan to implement a General Sales Tax (... more This paper discusses the efforts by the Government of Pakistan to implement a General Sales Tax (GST). First, a history of Pakistani tax reform efforts is presented along with the reforms recommended by the National Taxation Reforms Commission. After this, the design and implementation of the GST is discussed followed by an analysis of the political economy and provincial issues that arise in the process of implementing the GST. Finally, the paper discusses various proposals regarding the determination of the base for the GST. The paper concludes that the splitting of the GST by sectors, given the perspective that the 1930’s style sales tax, is not sensible, and the Pakistani formulation is more unstable than the assignment of the GST on goods.
Allama Iqbal stressed the need for khudi in terms of national identity and focus on selfreliance,... more Allama Iqbal stressed the need for khudi in terms of national identity and focus on selfreliance, without which there would have been no chance to break colonial bounds. The message still resonates today, in a period of economic crisis and lack of national agreement on tax reforms. International experience with decentralisation also emphasises the importance of significant own-source revenues in generating accountability and effective service delivery at all levels of government. Although the 18th Amendment of Pakistan Constitution makes significant strides towards clarifying spending responsibilities, the issue of subsidiarity is not effectively addressed, nor is the issue of implementable own-source of revenues. This runs the risk of generating unfunded mandates, further pressures and weakening of public service delivery, leading possibly to strengthening of ethnic and parochial divisions and centrifugal forces. Iqbal’s message is as important now as it was in the last century. JE...
The 1994 reforms in China were remarkably successful in stabilizing the economy and raising reven... more The 1994 reforms in China were remarkably successful in stabilizing the economy and raising revenues for the benefit of sustainable growth and permitting the central government to redistribute resources to poorer regions through an equalization framework. However, the rise of informal local borrowing in the absence of effective own-source revenues raises possible risks and imbalances in the future. There is thus a need to reconsider the fundamentals of intergovernmental fiscal relations, building on the basis laid in the 1994 reforms.
This paper extends a discussion of the investment cycle in another G-24 paper (Ahmad, 2017), in w... more This paper extends a discussion of the investment cycle in another G-24 paper (Ahmad, 2017), in which the questions concerning “what” to invest in and “where” are addressed. This paper examines the “how” of investment for sustainable development, focusing on options for contracting arrangements, such as PPPs, that would help to involve the private sector, manage risks in the presence of asymmetric information, as well as uncertainty about climate change. It also addresses the strengthening of national and local institutions and the possible role of international financial institutions. In discussing the investment options, the paper also updates an earlier G-24 review of the empirical and theoretical literature on involving the private sector involvement in public investments (Ahmad, Bhattacharya, Vinella, and Xiao, G-24 2015). Contracting Arrangements and PPPs for Sustainable Development Working Paper commissioned by the G-24 as part of its work program on financing for development
This paper discusses the efforts by the Government of Pakistan to implement a General Sales Tax (... more This paper discusses the efforts by the Government of Pakistan to implement a General Sales Tax (GST). First, a history of Pakistani tax reform efforts is presented along with the reforms recommended by the National Taxation Reforms Commission. After this, the design and implementation of the GST is discussed followed by an analysis of the political economy and provincial issues that arise in the process of implementing the GST. Finally, the paper discusses various proposals regarding the determination of the base for the GST. The paper concludes that the splitting of the GST by sectors, given the perspective that the 1930’s style sales tax, is not sensible, and the Pakistani formulation is more unstable than the assignment of the GST on goods.
Allama Iqbal stressed the need for khudi in terms of national identity and focus on selfreliance,... more Allama Iqbal stressed the need for khudi in terms of national identity and focus on selfreliance, without which there would have been no chance to break colonial bounds. The message still resonates today, in a period of economic crisis and lack of national agreement on tax reforms. International experience with decentralisation also emphasises the importance of significant own-source revenues in generating accountability and effective service delivery at all levels of government. Although the 18th Amendment of Pakistan Constitution makes significant strides towards clarifying spending responsibilities, the issue of subsidiarity is not effectively addressed, nor is the issue of implementable own-source of revenues. This runs the risk of generating unfunded mandates, further pressures and weakening of public service delivery, leading possibly to strengthening of ethnic and parochial divisions and centrifugal forces. Iqbal’s message is as important now as it was in the last century. JE...
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