Corporate Income Taxation and Unemployment: A Case Study of Pakistan and India

Abstract

Understanding the incidence of corporate taxation is important for a country in order to improve their policies to enhance business environment and job growth. The study is based on empirical investigation of corporate income tax and its impact on unemployment in case of Pakistan and India for period of 2000 to 2019.To find the appropriate results, the OLS regression technique has been utilized and the results are examined separately and comparatively. The results showed corporate income tax has insignificant effect on unemployment in both country Pakistan and India, except some control variables (working age population and urban population). Results further highlighted that still there is no significant impact of corporate income tax (CIT) on employment. The reason may be very little variation in the CIT and unemployment data of both countries from the assigned time and may the burden of corporate income tax may shift to the tertiary markets (consumers).