Role of Taxation in Formulation of Monetary Policy (Case study of Pakistan)

Abstract

Actually this is the problem of most of the countries to move or strengthen their economy by maintaining all necessary requirements in this light we worked out for the identification of the variables/reasons which can create the ways for more money available in the economy for utilizing it for growth and development, for that reason data was collected from the secondary sources like ministry of finance, state bank of Pakistan and applied linear regression to check the relationship, and concluded that model of the equation if perfect which clearly identifies that tax collections are highly and positively correlated with the monetary assets available in the country means when tax collection base is exactly planned or implemented no doubt collection will improve and this improvement will lead to more money available in the economy for the all reasons which leads the economic system towards growth and development.