Cost of corruption/tax evasion.

[ANG]

Hi, these numbers are scary, as no country can sustain this level economic hemorrhaging. These damn politicians will gladly borrow money and increase the debt, just to avoid taxes and having to crack down on corruption. Take care.

Widening gap: Budget deficit may touch Rs1.4 trillion by June – The Express Tribune

 

[Ignited Mind]

Is it possible to evaluate the actual cost of corruption upon an individual who commits the corruption?

Like if someone steals Rs. 100 from the govt. through corruption, that Rs. 100 will impact national growth and ultimately it will impact that same person in some way like higher opportunity cost or higher food prices, land cost or something.

I mean if someone stole Rs. 100 from the govt., is it possible to calculate what exact monetary impact will this act have on that very person in the long term?

 

[jagjitnatt]

Is it possible to evaluate the actual cost of corruption upon an individual who commits the corruption?

Like if someone steals Rs. 100 from the govt. through corruption, that Rs. 100 will impact national growth and ultimately it will impact that same person in some way like higher opportunity cost or higher food prices, land cost or something.

I mean if someone stole Rs. 100 from the govt., is it possible to calculate what exact monetary impact will this act have on that very person in the long term?

can be done. its very complex and it depends on the time period.
for eg: it can be Rs 5 in 2 years, Rs 25 after 5 years, Rs 50 after 8 years and Rs 100 after 14 years.
All depends on what you call long term.

 

[Developereo]

These damn politicians

all have Swiss bank accounts and foreign villas. As does the army brass.

If they haven't done anything for the past 60 years, what makes you think they will do it now?

 

[Ignited Mind]

can be done. its very complex and it depends on the time period.
for eg: it can be Rs 5 in 2 years, Rs 25 after 5 years, Rs 50 after 8 years and Rs 100 after 14 years.
All depends on what you call long term.

Let us assume a period of two years.

But then that mean that the person has actually gained Rs. 95 in two years.

Now if every citizen commits a fraud of Rs. 100 then he will gain Rs. 95 ultimately in two years and that would mean that the country as a whole is gaining something from corruption and not losing anything?

There's definitely something missing in this hypothesis.

 

[somebozo]

The real driver of corruption is still the Europeans with their loot grab and steal mentality. Imagine life made easier for dozens of countries of these so called "swiss" banking rules are dissolved across the northern Europe. Its not only Switzerland sheltering stolen national wealth but also Luxembourg, Denmark, Austria and half a dozen others.

 

[jamal18]

The real driver of corruption is still the Europeans with their loot grab and steal mentality. Imagine life made easier for dozens of countries of these so called "swiss" banking rules are dissolved across the northern Europe. Its not only Switzerland sheltering stolen national wealth but also Luxembourg, Denmark, Austria and half a dozen others.

No.

Let's not blame others for our failings

 

[Developereo]

The real driver of corruption is still the Europeans with their loot grab and steal mentality. Imagine life made easier for dozens of countries of these so called "swiss" banking rules are dissolved across the northern Europe. Its not only Switzerland sheltering stolen national wealth but also Luxembourg, Denmark, Austria and half a dozen others.

No, the real scum are our politicians who steal the money from Pakistan.

If Europe didn't do it, there would be a thousand banks in Cayman Islands where these theives could stash their money.

 

[jagjitnatt]

Let us assume a period of two years.

But then that mean that the person has actually gained Rs. 95 in two years.

Now if every citizen commits a fraud of Rs. 100 then he will gain Rs. 95 ultimately in two years and that would mean that the country as a whole is gaining something from corruption and not losing anything?

There's definitely something missing in this hypothesis.

You missed something. In case of tax evasion, the person isn't gaining Rs 95, he's saving Rs 95. There's a huge difference.

In case of corruption, the person who gained Rs 95, has removed those Rs 95 from the Tax system of the country. Now those Rs 95 would be unaccounted for in records. So the country has lost Rs 95 there, whereas the person has gained Rs 95.

So actually the money doesn't go anywhere, it just becomes useless as it can not be used for the development of the country. When the corruption is increases, huge amounts of money start escaping the tax system. So the state starts running short of money, which stagnates growth, development, which results in problems like price rise, loss of jobs and inefficiency. So in the end it hurts the person who was corrupt. He may be driving a Mercedes, but he won't get the smooth roads to drive on. The money he spent on the Merc will be taken away by the Germans. He will be rich, but in the process thousands of other people will become poor.
Also, since the govt is running short on money, it takes loans from other countries, needs to spend more on development, and ends up broke.

This is a very brief way in which money from corruption is lost, and the country gets poorer.