Improving Tax Return Literacy in Pakistan: The Crucial Role of HEC, Curriculum Integration, and Collaboration with the Federal Board of Revenue

Abstract

The purpose of this study is to increase the tax return literacy and understanding of university students in Pakistan regarding the urgent issue related to lack of tax compliance, and financial literacy in the country. By incorporating the Financial Literacy Framework as a theoretical foundation, this study aimed to provide a holistic model of financial education focusing on the role the tax literacy plays as a key dimension of financial capability. The research design for this study is quantitative in nature and used the deductive reasoning model to test hypotheses about tax literacy and compliance. Using the Saunders Onion Model, the paper presented an organized data collection process for empirical data gathered from students studying in the public and private universities of Pakistan. This will be implemented in stages, including university student education, student-run tax return preparation programs and compulsory tax return lodgments for new university entries. The design for each stage was implemented to develop tax literacy amongst the population by way of training and participation in local activities. Collection of data was a collaboratively effort with the Federal Board of Revenue (FBR) to ensure students received the most updated and well-suited information to make training more efficient. Surveys and evaluations were recommended to measure changes in knowledge and adherence, creating a strong structure to evaluate the program's effectiveness. This study has education and policy implications—education to academia: tax literacy should be included in university curricula; policy—expanding education may help solve the problem. Directions for future research are extending curriculum integration to BISE boards, comparison of the international models in tax education and the use of technology for education that is scalable. This study can change the tax literacy of Pakistan and make it possible for the upcoming generations to comprehend the terminologies of tax system.