The aim ofthe study is to evaluate the determinants of tax revenue and role of informal sectorin Pakistan over the period of 1972-2014 by ‘applying the time series econometric technique. We applied boundtesting of cointegration to check the long run relationship and Error Correction Model (ECM)to check the short relationship between tax revenue and its determinants. Results indicate that normalized cointegrating equation that budget deficit, total public debt, per capita income, informal industry, formal services, informal services have negative association with tax revenue while formal industry and trade openness have positive impact on tax revenue in long run. According to ECM results, there is a negative value of error correction coefficient, i.e., – 0.56. It indicates that whenever there is a deviation from jong run equilibrium path, variable adjusts toward the equilibrium. Results suggest public debt; per capita income, openness, formal services and informal services have positive impact on tax revenue while budget deficit and formal industry have negative impact on tax revenue. Supervisor- Dr. Iftikhar Ahmad Co-Supervisor:- Muhammad Ali Kemal