Distribution of Agricultural Tax Burden within the Sector

B. A. Azhar


Considerable work has been done on the estimation of tax
burden on agriculture, but not enough on its distribution within the
sector. The main estimators of tax burden are: Qureshi (1986), Qureshi
(1987), Dorosch and Valdes (1990), Hamid, Nabi and Nasim (1~), Chaudhry
and Kayani (1991) and Chaudhry and Maan (1991a). The estimates of the
tax burden made by various authors are mutually not comparable due to
differences in coverage, assumptions and methodologies used. The latest
and the most comprehensive estimate of the total tax burden on
agriculture is that of Chaudhry and Maan (1991a). The authors have
included in their estimates the burden of all the direct, indirect and
implicit taxes of the federal, provincial and local governmeitts on
agriculture. The total burden on these taxes adds up to an incredible
level of 44 percent of the value added in agriculture during the 1980s.
The breakdown of the tax burden shows that direct taxes account for less
than one percentage point and the local taxes for less than two
percentage points. Half of the tax burden (22 percent) is contributed by
indirect taxes (and non-tax revenues). The remaining 20 percent of the
tax load is due to implicit taxation.

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DOI: https://doi.org/10.30541/v31i4IIpp.939-951


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