Domestic Terms of Trade in Pakistan : Implications for Agricultural Pricing and Taxation Policies
In 2008 the Government of Pakistan agreed with the International Monetary Fund (IMF) to increase the tax/Gross Domestic Product (GDP) ratio by 3.5 percentage points over the medium term. This commitment has rekindled the debate regarding the agricultural income tax. Advocates of an agricultural income tax argue that the sector remains protected by political interests, while opponents to such a tax maintain that agriculture is already subject to significant indirect taxation, mainly because of prevailing price distortions in agricultural product markets. This paper reviews the literature on domestic terms of trade analysis in Pakistan and calculates an updated set of terms of trade indices for agriculture relative to industry. The paper also discusses key issues with regard to the imposition of agricultural income tax in Pakistan, and uses simulation results from a Computable General Equilibrium (CGE) model for the Pakistan economy to analyze the potential effects of the imposition of an agricultural income tax on poverty and fiscal revenues. The results suggest that the domestic terms of trade have remained unfavorable for Pakistan's agriculture during almost the entire 2000-2009 period. Agriculture's terms of trade declined from 2001-02 to 2003-04 before improving only slightly during the period from 2004-05 to 2006-07. As of 2007 however, prices of agricultural commodities started rising resulting in significant increases in agriculture's terms of trade. But in spite of the substantial increases in agricultural prices, the terms of trade for agriculture, though on a rising trend, remained marginally unfavorable to the sector.
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Estados Unidos |
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| language |
English en_US |
| topic |
ACCOUNTING ADMINISTRATIVE COSTS ADVERSE EFFECT AGRICULTURAL COMMODITIES AGRICULTURAL COMMODITY AGRICULTURAL INCOMES AGRICULTURAL LAND AGRICULTURAL OUTPUT AGRICULTURAL POLICY AGRICULTURAL PRICES AGRICULTURAL PRODUCE AGRICULTURAL PRODUCT AGRICULTURAL PRODUCTION AGRICULTURAL SECTOR AGRICULTURAL SECTORS AGRICULTURE AVERAGE HOUSEHOLD INCOME BASE YEAR COMMODITY COMPETITIVENESS CONSUMER EXPENDITURE CONSUMERS CONSUMPTION BASKET DECOMPOSABLE POVERTY DEFLATORS DEVELOPMENT ECONOMICS DEVELOPMENT STRATEGIES DISPOSABLE INCOME DIVIDEND DIVIDEND INCOME DIVIDENDS DOMESTIC MARKET DROUGHT ECONOMIC STRUCTURE ELASTICITY ELASTICITY OF SUBSTITUTION EQUIPMENT EXCHANGE RATE EXPORT MARKET EXPORT PRICE INDEX EXPORT SHARE EXPORTS FACTORS OF PRODUCTION FARM LABOR FARMER FARMERS FISCAL DEFICIT FOOD ITEMS FOOD POLICY FOOD PRICE FOOD PRICES FOREIGN TRADE FRAUD GDP GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT REVENUE GOVERNMENT REVENUES GROWTH RATES HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HOUSEHOLD INCOMES HOUSEHOLD SAVINGS HOUSING INCIDENCE OF POVERTY INCOME INCOME DISTRIBUTION INCOME SHARES INCOME TAX INDUSTRIALIZATION INEQUALITY LAND HOLDINGS LANDHOLDINGS LANDLESS AGRICULTURAL WORKERS LANDOWNERS LIBERALIZATION MILK MONETARY FUND NATIONAL INCOME OUTPUTS PER CAPITA CONSUMPTION PER CAPITA INCOME POOR POOR FARMERS POOR HOUSEHOLD POOR HOUSEHOLDS POVERTY GAP POVERTY GAP INDEX POVERTY HEADCOUNT RATE POVERTY INCIDENCE POVERTY INCREASE POVERTY LINE POVERTY MEASURES POVERTY REDUCING POVERTY SEVERITY PRICE CHANGES PRICE CONTROLS PRICE DISTORTIONS PRICE INCREASES PRODUCT MARKETS PRODUCTION FUNCTION PRODUCTION OF WHEAT PRODUCTION STRUCTURE PUBLIC INVESTMENTS PURCHASING POWER RATES OF RETURN REAL INCOME REMITTANCES RETURN RETURNS RURAL RURAL AREAS RURAL HOUSEHOLDS RURAL POPULATION RURAL POPULATIONS RURAL POVERTY SAVINGS SKILLED WORKERS SMALL FARMS STATE BANK STRUCTURAL ADJUSTMENT TARIFF REVENUE TAX COLLECTION TAX POLICY TAX RATE TAX RATES TAX REGIMES TAX REVENUES TAX STRUCTURE TAXATION TAXATION POLICIES TOTAL OUTPUT TRADE POLICIES TRADE SECTOR URBAN REGIONS VALUE ADDED VEGETABLES WAR WEALTH WHOLESALE PRICE INDEX WHOLESALE PRICE INDICES WHOLESALE PRICES ACCOUNTING ADMINISTRATIVE COSTS ADVERSE EFFECT AGRICULTURAL COMMODITIES AGRICULTURAL COMMODITY AGRICULTURAL INCOMES AGRICULTURAL LAND AGRICULTURAL OUTPUT AGRICULTURAL POLICY AGRICULTURAL PRICES AGRICULTURAL PRODUCE AGRICULTURAL PRODUCT AGRICULTURAL PRODUCTION AGRICULTURAL SECTOR AGRICULTURAL SECTORS AGRICULTURE AVERAGE HOUSEHOLD INCOME BASE YEAR COMMODITY COMPETITIVENESS CONSUMER EXPENDITURE CONSUMERS CONSUMPTION BASKET DECOMPOSABLE POVERTY DEFLATORS DEVELOPMENT ECONOMICS DEVELOPMENT STRATEGIES DISPOSABLE INCOME DIVIDEND DIVIDEND INCOME DIVIDENDS DOMESTIC MARKET DROUGHT ECONOMIC STRUCTURE ELASTICITY ELASTICITY OF SUBSTITUTION EQUIPMENT EXCHANGE RATE EXPORT MARKET EXPORT PRICE INDEX EXPORT SHARE EXPORTS FACTORS OF PRODUCTION FARM LABOR FARMER FARMERS FISCAL DEFICIT FOOD ITEMS FOOD POLICY FOOD PRICE FOOD PRICES FOREIGN TRADE FRAUD GDP GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT REVENUE GOVERNMENT REVENUES GROWTH RATES HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HOUSEHOLD INCOMES HOUSEHOLD SAVINGS HOUSING INCIDENCE OF POVERTY INCOME INCOME DISTRIBUTION INCOME SHARES INCOME TAX INDUSTRIALIZATION INEQUALITY LAND HOLDINGS LANDHOLDINGS LANDLESS AGRICULTURAL WORKERS LANDOWNERS LIBERALIZATION MILK MONETARY FUND NATIONAL INCOME OUTPUTS PER CAPITA CONSUMPTION PER CAPITA INCOME POOR POOR FARMERS POOR HOUSEHOLD POOR HOUSEHOLDS POVERTY GAP POVERTY GAP INDEX POVERTY HEADCOUNT RATE POVERTY INCIDENCE POVERTY INCREASE POVERTY LINE POVERTY MEASURES POVERTY REDUCING POVERTY SEVERITY PRICE CHANGES PRICE CONTROLS PRICE DISTORTIONS PRICE INCREASES PRODUCT MARKETS PRODUCTION FUNCTION PRODUCTION OF WHEAT PRODUCTION STRUCTURE PUBLIC INVESTMENTS PURCHASING POWER RATES OF RETURN REAL INCOME REMITTANCES RETURN RETURNS RURAL RURAL AREAS RURAL HOUSEHOLDS RURAL POPULATION RURAL POPULATIONS RURAL POVERTY SAVINGS SKILLED WORKERS SMALL FARMS STATE BANK STRUCTURAL ADJUSTMENT TARIFF REVENUE TAX COLLECTION TAX POLICY TAX RATE TAX RATES TAX REGIMES TAX REVENUES TAX STRUCTURE TAXATION TAXATION POLICIES TOTAL OUTPUT TRADE POLICIES TRADE SECTOR URBAN REGIONS VALUE ADDED VEGETABLES WAR WEALTH WHOLESALE PRICE INDEX WHOLESALE PRICE INDICES WHOLESALE PRICES |
| spellingShingle |
ACCOUNTING ADMINISTRATIVE COSTS ADVERSE EFFECT AGRICULTURAL COMMODITIES AGRICULTURAL COMMODITY AGRICULTURAL INCOMES AGRICULTURAL LAND AGRICULTURAL OUTPUT AGRICULTURAL POLICY AGRICULTURAL PRICES AGRICULTURAL PRODUCE AGRICULTURAL PRODUCT AGRICULTURAL PRODUCTION AGRICULTURAL SECTOR AGRICULTURAL SECTORS AGRICULTURE AVERAGE HOUSEHOLD INCOME BASE YEAR COMMODITY COMPETITIVENESS CONSUMER EXPENDITURE CONSUMERS CONSUMPTION BASKET DECOMPOSABLE POVERTY DEFLATORS DEVELOPMENT ECONOMICS DEVELOPMENT STRATEGIES DISPOSABLE INCOME DIVIDEND DIVIDEND INCOME DIVIDENDS DOMESTIC MARKET DROUGHT ECONOMIC STRUCTURE ELASTICITY ELASTICITY OF SUBSTITUTION EQUIPMENT EXCHANGE RATE EXPORT MARKET EXPORT PRICE INDEX EXPORT SHARE EXPORTS FACTORS OF PRODUCTION FARM LABOR FARMER FARMERS FISCAL DEFICIT FOOD ITEMS FOOD POLICY FOOD PRICE FOOD PRICES FOREIGN TRADE FRAUD GDP GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT REVENUE GOVERNMENT REVENUES GROWTH RATES HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HOUSEHOLD INCOMES HOUSEHOLD SAVINGS HOUSING INCIDENCE OF POVERTY INCOME INCOME DISTRIBUTION INCOME SHARES INCOME TAX INDUSTRIALIZATION INEQUALITY LAND HOLDINGS LANDHOLDINGS LANDLESS AGRICULTURAL WORKERS LANDOWNERS LIBERALIZATION MILK MONETARY FUND NATIONAL INCOME OUTPUTS PER CAPITA CONSUMPTION PER CAPITA INCOME POOR POOR FARMERS POOR HOUSEHOLD POOR HOUSEHOLDS POVERTY GAP POVERTY GAP INDEX POVERTY HEADCOUNT RATE POVERTY INCIDENCE POVERTY INCREASE POVERTY LINE POVERTY MEASURES POVERTY REDUCING POVERTY SEVERITY PRICE CHANGES PRICE CONTROLS PRICE DISTORTIONS PRICE INCREASES PRODUCT MARKETS PRODUCTION FUNCTION PRODUCTION OF WHEAT PRODUCTION STRUCTURE PUBLIC INVESTMENTS PURCHASING POWER RATES OF RETURN REAL INCOME REMITTANCES RETURN RETURNS RURAL RURAL AREAS RURAL HOUSEHOLDS RURAL POPULATION RURAL POPULATIONS RURAL POVERTY SAVINGS SKILLED WORKERS SMALL FARMS STATE BANK STRUCTURAL ADJUSTMENT TARIFF REVENUE TAX COLLECTION TAX POLICY TAX RATE TAX RATES TAX REGIMES TAX REVENUES TAX STRUCTURE TAXATION TAXATION POLICIES TOTAL OUTPUT TRADE POLICIES TRADE SECTOR URBAN REGIONS VALUE ADDED VEGETABLES WAR WEALTH WHOLESALE PRICE INDEX WHOLESALE PRICE INDICES WHOLESALE PRICES ACCOUNTING ADMINISTRATIVE COSTS ADVERSE EFFECT AGRICULTURAL COMMODITIES AGRICULTURAL COMMODITY AGRICULTURAL INCOMES AGRICULTURAL LAND AGRICULTURAL OUTPUT AGRICULTURAL POLICY AGRICULTURAL PRICES AGRICULTURAL PRODUCE AGRICULTURAL PRODUCT AGRICULTURAL PRODUCTION AGRICULTURAL SECTOR AGRICULTURAL SECTORS AGRICULTURE AVERAGE HOUSEHOLD INCOME BASE YEAR COMMODITY COMPETITIVENESS CONSUMER EXPENDITURE CONSUMERS CONSUMPTION BASKET DECOMPOSABLE POVERTY DEFLATORS DEVELOPMENT ECONOMICS DEVELOPMENT STRATEGIES DISPOSABLE INCOME DIVIDEND DIVIDEND INCOME DIVIDENDS DOMESTIC MARKET DROUGHT ECONOMIC STRUCTURE ELASTICITY ELASTICITY OF SUBSTITUTION EQUIPMENT EXCHANGE RATE EXPORT MARKET EXPORT PRICE INDEX EXPORT SHARE EXPORTS FACTORS OF PRODUCTION FARM LABOR FARMER FARMERS FISCAL DEFICIT FOOD ITEMS FOOD POLICY FOOD PRICE FOOD PRICES FOREIGN TRADE FRAUD GDP GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT REVENUE GOVERNMENT REVENUES GROWTH RATES HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HOUSEHOLD INCOMES HOUSEHOLD SAVINGS HOUSING INCIDENCE OF POVERTY INCOME INCOME DISTRIBUTION INCOME SHARES INCOME TAX INDUSTRIALIZATION INEQUALITY LAND HOLDINGS LANDHOLDINGS LANDLESS AGRICULTURAL WORKERS LANDOWNERS LIBERALIZATION MILK MONETARY FUND NATIONAL INCOME OUTPUTS PER CAPITA CONSUMPTION PER CAPITA INCOME POOR POOR FARMERS POOR HOUSEHOLD POOR HOUSEHOLDS POVERTY GAP POVERTY GAP INDEX POVERTY HEADCOUNT RATE POVERTY INCIDENCE POVERTY INCREASE POVERTY LINE POVERTY MEASURES POVERTY REDUCING POVERTY SEVERITY PRICE CHANGES PRICE CONTROLS PRICE DISTORTIONS PRICE INCREASES PRODUCT MARKETS PRODUCTION FUNCTION PRODUCTION OF WHEAT PRODUCTION STRUCTURE PUBLIC INVESTMENTS PURCHASING POWER RATES OF RETURN REAL INCOME REMITTANCES RETURN RETURNS RURAL RURAL AREAS RURAL HOUSEHOLDS RURAL POPULATION RURAL POPULATIONS RURAL POVERTY SAVINGS SKILLED WORKERS SMALL FARMS STATE BANK STRUCTURAL ADJUSTMENT TARIFF REVENUE TAX COLLECTION TAX POLICY TAX RATE TAX RATES TAX REGIMES TAX REVENUES TAX STRUCTURE TAXATION TAXATION POLICIES TOTAL OUTPUT TRADE POLICIES TRADE SECTOR URBAN REGIONS VALUE ADDED VEGETABLES WAR WEALTH WHOLESALE PRICE INDEX WHOLESALE PRICE INDICES WHOLESALE PRICES World Bank Domestic Terms of Trade in Pakistan : Implications for Agricultural Pricing and Taxation Policies |
| description |
In 2008 the Government of Pakistan
agreed with the International Monetary Fund (IMF) to
increase the tax/Gross Domestic Product (GDP) ratio by 3.5
percentage points over the medium term. This commitment has
rekindled the debate regarding the agricultural income tax.
Advocates of an agricultural income tax argue that the
sector remains protected by political interests, while
opponents to such a tax maintain that agriculture is already
subject to significant indirect taxation, mainly because of
prevailing price distortions in agricultural product
markets. This paper reviews the literature on domestic terms
of trade analysis in Pakistan and calculates an updated set
of terms of trade indices for agriculture relative to
industry. The paper also discusses key issues with regard
to the imposition of agricultural income tax in Pakistan,
and uses simulation results from a Computable General
Equilibrium (CGE) model for the Pakistan economy to analyze
the potential effects of the imposition of an agricultural
income tax on poverty and fiscal revenues. The results
suggest that the domestic terms of trade have remained
unfavorable for Pakistan's agriculture during almost
the entire 2000-2009 period. Agriculture's terms of
trade declined from 2001-02 to 2003-04 before improving only
slightly during the period from 2004-05 to 2006-07. As of
2007 however, prices of agricultural commodities started
rising resulting in significant increases in
agriculture's terms of trade. But in spite of the
substantial increases in agricultural prices, the terms of
trade for agriculture, though on a rising trend, remained
marginally unfavorable to the sector. |
| topic_facet |
ACCOUNTING ADMINISTRATIVE COSTS ADVERSE EFFECT AGRICULTURAL COMMODITIES AGRICULTURAL COMMODITY AGRICULTURAL INCOMES AGRICULTURAL LAND AGRICULTURAL OUTPUT AGRICULTURAL POLICY AGRICULTURAL PRICES AGRICULTURAL PRODUCE AGRICULTURAL PRODUCT AGRICULTURAL PRODUCTION AGRICULTURAL SECTOR AGRICULTURAL SECTORS AGRICULTURE AVERAGE HOUSEHOLD INCOME BASE YEAR COMMODITY COMPETITIVENESS CONSUMER EXPENDITURE CONSUMERS CONSUMPTION BASKET DECOMPOSABLE POVERTY DEFLATORS DEVELOPMENT ECONOMICS DEVELOPMENT STRATEGIES DISPOSABLE INCOME DIVIDEND DIVIDEND INCOME DIVIDENDS DOMESTIC MARKET DROUGHT ECONOMIC STRUCTURE ELASTICITY ELASTICITY OF SUBSTITUTION EQUIPMENT EXCHANGE RATE EXPORT MARKET EXPORT PRICE INDEX EXPORT SHARE EXPORTS FACTORS OF PRODUCTION FARM LABOR FARMER FARMERS FISCAL DEFICIT FOOD ITEMS FOOD POLICY FOOD PRICE FOOD PRICES FOREIGN TRADE FRAUD GDP GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT REVENUE GOVERNMENT REVENUES GROWTH RATES HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HOUSEHOLD INCOMES HOUSEHOLD SAVINGS HOUSING INCIDENCE OF POVERTY INCOME INCOME DISTRIBUTION INCOME SHARES INCOME TAX INDUSTRIALIZATION INEQUALITY LAND HOLDINGS LANDHOLDINGS LANDLESS AGRICULTURAL WORKERS LANDOWNERS LIBERALIZATION MILK MONETARY FUND NATIONAL INCOME OUTPUTS PER CAPITA CONSUMPTION PER CAPITA INCOME POOR POOR FARMERS POOR HOUSEHOLD POOR HOUSEHOLDS POVERTY GAP POVERTY GAP INDEX POVERTY HEADCOUNT RATE POVERTY INCIDENCE POVERTY INCREASE POVERTY LINE POVERTY MEASURES POVERTY REDUCING POVERTY SEVERITY PRICE CHANGES PRICE CONTROLS PRICE DISTORTIONS PRICE INCREASES PRODUCT MARKETS PRODUCTION FUNCTION PRODUCTION OF WHEAT PRODUCTION STRUCTURE PUBLIC INVESTMENTS PURCHASING POWER RATES OF RETURN REAL INCOME REMITTANCES RETURN RETURNS RURAL RURAL AREAS RURAL HOUSEHOLDS RURAL POPULATION RURAL POPULATIONS RURAL POVERTY SAVINGS SKILLED WORKERS SMALL FARMS STATE BANK STRUCTURAL ADJUSTMENT TARIFF REVENUE TAX COLLECTION TAX POLICY TAX RATE TAX RATES TAX REGIMES TAX REVENUES TAX STRUCTURE TAXATION TAXATION POLICIES TOTAL OUTPUT TRADE POLICIES TRADE SECTOR URBAN REGIONS VALUE ADDED VEGETABLES WAR WEALTH WHOLESALE PRICE INDEX WHOLESALE PRICE INDICES WHOLESALE PRICES |
| author |
World Bank |
| author_facet |
World Bank |
| author_sort |
World Bank |
| title |
Domestic Terms of Trade in Pakistan : Implications for Agricultural Pricing and Taxation Policies |
| title_short |
Domestic Terms of Trade in Pakistan : Implications for Agricultural Pricing and Taxation Policies |
| title_full |
Domestic Terms of Trade in Pakistan : Implications for Agricultural Pricing and Taxation Policies |
| title_fullStr |
Domestic Terms of Trade in Pakistan : Implications for Agricultural Pricing and Taxation Policies |
| title_full_unstemmed |
Domestic Terms of Trade in Pakistan : Implications for Agricultural Pricing and Taxation Policies |
| title_sort |
domestic terms of trade in pakistan : implications for agricultural pricing and taxation policies |
| publisher |
Washington, DC |
| publishDate |
2010-11 |
| url |
http://documents.worldbank.org/curated/en/2010/11/16269211/domestic-terms-trade-pakistan-implications-agricultural-pricing-taxation-policies https://hdl.handle.net/10986/12448 |
| work_keys_str_mv |
AT worldbank domestictermsoftradeinpakistanimplicationsforagriculturalpricingandtaxationpolicies |
| _version_ |
1807155202929721344 |
| spelling |
dig-okr-10986124482024-08-08T15:14:20Z Domestic Terms of Trade in Pakistan : Implications for Agricultural Pricing and Taxation Policies World Bank ACCOUNTING ADMINISTRATIVE COSTS ADVERSE EFFECT AGRICULTURAL COMMODITIES AGRICULTURAL COMMODITY AGRICULTURAL INCOMES AGRICULTURAL LAND AGRICULTURAL OUTPUT AGRICULTURAL POLICY AGRICULTURAL PRICES AGRICULTURAL PRODUCE AGRICULTURAL PRODUCT AGRICULTURAL PRODUCTION AGRICULTURAL SECTOR AGRICULTURAL SECTORS AGRICULTURE AVERAGE HOUSEHOLD INCOME BASE YEAR COMMODITY COMPETITIVENESS CONSUMER EXPENDITURE CONSUMERS CONSUMPTION BASKET DECOMPOSABLE POVERTY DEFLATORS DEVELOPMENT ECONOMICS DEVELOPMENT STRATEGIES DISPOSABLE INCOME DIVIDEND DIVIDEND INCOME DIVIDENDS DOMESTIC MARKET DROUGHT ECONOMIC STRUCTURE ELASTICITY ELASTICITY OF SUBSTITUTION EQUIPMENT EXCHANGE RATE EXPORT MARKET EXPORT PRICE INDEX EXPORT SHARE EXPORTS FACTORS OF PRODUCTION FARM LABOR FARMER FARMERS FISCAL DEFICIT FOOD ITEMS FOOD POLICY FOOD PRICE FOOD PRICES FOREIGN TRADE FRAUD GDP GOVERNMENT EXPENDITURE GOVERNMENT EXPENDITURES GOVERNMENT REVENUE GOVERNMENT REVENUES GROWTH RATES HOUSEHOLD CONSUMPTION HOUSEHOLD INCOME HOUSEHOLD INCOMES HOUSEHOLD SAVINGS HOUSING INCIDENCE OF POVERTY INCOME INCOME DISTRIBUTION INCOME SHARES INCOME TAX INDUSTRIALIZATION INEQUALITY LAND HOLDINGS LANDHOLDINGS LANDLESS AGRICULTURAL WORKERS LANDOWNERS LIBERALIZATION MILK MONETARY FUND NATIONAL INCOME OUTPUTS PER CAPITA CONSUMPTION PER CAPITA INCOME POOR POOR FARMERS POOR HOUSEHOLD POOR HOUSEHOLDS POVERTY GAP POVERTY GAP INDEX POVERTY HEADCOUNT RATE POVERTY INCIDENCE POVERTY INCREASE POVERTY LINE POVERTY MEASURES POVERTY REDUCING POVERTY SEVERITY PRICE CHANGES PRICE CONTROLS PRICE DISTORTIONS PRICE INCREASES PRODUCT MARKETS PRODUCTION FUNCTION PRODUCTION OF WHEAT PRODUCTION STRUCTURE PUBLIC INVESTMENTS PURCHASING POWER RATES OF RETURN REAL INCOME REMITTANCES RETURN RETURNS RURAL RURAL AREAS RURAL HOUSEHOLDS RURAL POPULATION RURAL POPULATIONS RURAL POVERTY SAVINGS SKILLED WORKERS SMALL FARMS STATE BANK STRUCTURAL ADJUSTMENT TARIFF REVENUE TAX COLLECTION TAX POLICY TAX RATE TAX RATES TAX REGIMES TAX REVENUES TAX STRUCTURE TAXATION TAXATION POLICIES TOTAL OUTPUT TRADE POLICIES TRADE SECTOR URBAN REGIONS VALUE ADDED VEGETABLES WAR WEALTH WHOLESALE PRICE INDEX WHOLESALE PRICE INDICES WHOLESALE PRICES In 2008 the Government of Pakistan agreed with the International Monetary Fund (IMF) to increase the tax/Gross Domestic Product (GDP) ratio by 3.5 percentage points over the medium term. This commitment has rekindled the debate regarding the agricultural income tax. Advocates of an agricultural income tax argue that the sector remains protected by political interests, while opponents to such a tax maintain that agriculture is already subject to significant indirect taxation, mainly because of prevailing price distortions in agricultural product markets. This paper reviews the literature on domestic terms of trade analysis in Pakistan and calculates an updated set of terms of trade indices for agriculture relative to industry. The paper also discusses key issues with regard to the imposition of agricultural income tax in Pakistan, and uses simulation results from a Computable General Equilibrium (CGE) model for the Pakistan economy to analyze the potential effects of the imposition of an agricultural income tax on poverty and fiscal revenues. The results suggest that the domestic terms of trade have remained unfavorable for Pakistan's agriculture during almost the entire 2000-2009 period. Agriculture's terms of trade declined from 2001-02 to 2003-04 before improving only slightly during the period from 2004-05 to 2006-07. As of 2007 however, prices of agricultural commodities started rising resulting in significant increases in agriculture's terms of trade. But in spite of the substantial increases in agricultural prices, the terms of trade for agriculture, though on a rising trend, remained marginally unfavorable to the sector. 2013-02-21T20:59:23Z 2013-02-21T20:59:23Z 2010-11 http://documents.worldbank.org/curated/en/2010/11/16269211/domestic-terms-trade-pakistan-implications-agricultural-pricing-taxation-policies https://hdl.handle.net/10986/12448 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank application/pdf text/plain Washington, DC |