Impact of Taxation on Foreign Direct Investment: Empirical Evidence from Pakistan

Foreign direct investment plays a vital role in promoting economic growth, especially for developing economies. It causes improvement the different sectors such as education, healthcare, manufacturing industries, and creates more jobs. The speed of FDI inflows has been increasing Pakistan each year. In order to attract FDI, many countries try reframe their tax policies by introducing incentives holidays, allowances, exemptions, deductions etc. purpose present paper is find implication taxation decision Pakistan. Time series data used spanning over 1985 2020. was obtained from two sources: “World Development Indicator” (WDI) “Economic Survey Pakistan”. “Auto-Regressive Distributed Lag” (ARDL) “Error Correction Model” (ECM) techniques are empirical analysis. study concludes that low taxes motivate foreign investors' contribution long-run relationship between Other control variables, including GDP trade openness exchange rate, positively impact FDI. suggested decision-makers should reduce welcome this regard, government needs reconsider its priorities while making favouring