Issues in Pakistan’s Direct Taxes: An Examination of the Recent Problems in the Income Tax Ordinance, 2001

ABSTRACT
Pakistan is amongst the countries with reliance on indirect taxes more than the direct taxes, as far as the revenue collection from tax is concerned. Being a law dynamic in nature, income tax law in Pakistan undergoes several changes in a tax year; some proving to be useful while others problematic. In either case, there are some flaws exposed due to reliance of each statutory provision over the others. As of the tax year 2022, there are several problems including tax on deemed income, super tax, active taxpayers list, recharacterization of income, withholding taxes, presumptive taxation and some procedural aspects. This paper tends to examine the legal aspects all of these problems with reference to their relevant provisions of law and also aims at providing pragmatic solutions and recommendations that may be adopted for a better system of direct taxes in Pakistan.