An out of the box thinking can change perspective of complete income tax system. At one hand, all direct and indirect taxes can be abolished in one go and on the other maximum number of people can be brought in tax net. A simple system can replace prevailing complicated and inefficient system, yet effective enough to generate sufficient funds. Implementation of such system should not be any problem in this era of technology.
Solution to a simple and efficient tax collection system is three step formula.
1. Abolish prevailing income tax, sales tax, FED, Income Support levy etc. and implement Final Tax Regime.
2. Implement policy of no cash transaction for amounts more than PKR5000. The policy already exists for corporates, which should be extended it to individual as well.
3. Put a tax of 2% on all (in and out) transactions through banks.
According to the State Bank of Pakistan total amount transacted through banks between July-Sept’12 was PKR 40.549 Trillion
[1]. It can be safely estimated that PKR162.199 trillion was transacted in year 2012. Thus, PKR3.24 Trillion can be collected as full and final income tax. By ensuring all transactions above PKR5,000 through banking channel will increase amount bank transactions by at least 100%. It can be safely estimated that through this procedure government will be able to collect more than PKR 6 trillion per year. It will bring maximum number of people in the tax net and allow participation of tax payers towards national development. No further taxation will be required by the government, whatsoever. It does not require any explanation as to what will be the effect of such taxation system, yet few benefits are outlined
1. Negative inflation of 15-20% will be observed in first year of implementation, which would be an instant relief to each and every citizen of Pakistan.
2. No one will escape tax net and country will have well documented economy.
3. Equal percentage and proportionate contribution by maximum number of taxpayers will be ensured.
4. Requirement for higher denomination currency notes will reduce, thus circulation of black money can be controlled by removing PKR5000 and PKR 1000 currency notes from market.
5. Less cash with people will also help in reducing crime rate.
Bank account opening should not be a problem, each Pakistani has a unique identification number called CNIC. And state runs a bank named National Bank. This combination will ensure each Pakistani has a bank account.
, we are not afraid of standing in queues "
..... 
Nawaz
at least India has 60% population using bank accounts our leaders have no vision and just barely only 16% of Pak population have a bank account, my first step would be to ensure most of the population are using bank accounts, and prepare the nation.... Warn them of consequences and then suddenly slap down the demonetization...scrap the 5000 and 1000 notes..... we going to make Pakistan Great Again!!!!
