Demonetize the 5000, 1000 notes in Pakistan?

[EpiiC]

1 )Only 0.57% of Pakistanis, or 768,000 people out of a population of 190 million pay income tax. Pakistan is in a terrible situation....Yes i agree with this it is horrible and i am saying the same thing..I just differ on the cause of illness.The main reason is exemptions and lower net tax base. With a tax-to-GDP ratio of 11.5%, Pakistan falls close to the bottom in the ranking of countries .68% of the tax revenue being generated from indirect taxes .See where the gaps are.

2) Tax evasion...You are right but again cause of illness is not 1,000 or 5,000 notes . So by scrapping it nothing will achieve.You can treat headache with disprine but not tumor..What is cause here ? Deficiencies in Tax law.. Lets say somebody needs to pay me an amount in Pakistan and i don't want FBR to question it. I will ask him to sent me abroad by Money changers and then i transfer it back to my account in Pakistan or at my father account. No body can question this money now.Why Oversears are exempted of declaring source and pay tax on remittance. Look it is LEGAL Now. In spirit it is illegal/black or whatever.I have stated the easiest way..There are 10 other ways to do it..

3) Agriculture sector in Pakistan contributes around 21% of total gross domestic product (GDP), but the cumulative collection of agriculture tax is less than 1% of the total.See it has nothing to do with notes again. Cause is regressive tax..Same is the case with Real Estate business.


Reasons
An inefficient tax administration, exemptions, amnesty schemes, complex and non-transparent tax system, corruption and tax evasion, and a non-supportive political environment that does not want to increase tax base. i agreed with you on encouraging the people to use Banks and document the undocumented economy which in essence means the same i.e Increase Tax to GDP.
Without this you can demonetize 10 times nothing will change.

Yes which is why my first step would be to get the majority of the population to use bank accounts, currently only 16% of the population have bank accounts, Modi in India made 250MILLION banks accounts from 2014-16.... If Modi can do 250M in 2 years why cant Nawaz do 100M more bank users? We need to monitor the economy and take great steps to improve the tax situation in the country.... Current tax to gdp is 12.4% according to Wiki where did u get 11.5% figure that's even worse.

 

[H!TchHiker]

Yes which is why my first step would be to get the majority of the population to use bank accounts, currently only 16% of the population have bank accounts, Modi in India made 250MILLION banks accounts from 2014-16.... If Modi can do 250M in 2 years why cant Nawaz do 100M more bank users? We need to monitor the economy and take great steps to improve the tax situation in the country.... Current tax to gdp is 12.4% according to Wiki where did u get 11.5% figure that's even worse.

Yes a fair point..Political will is much needed to reform the economy and that is what unfortunately we don;t have right now

 

[EpiiC]

Yes a fair point..Political will is much needed to reform the economy and that is what unfortunately we don;t have right now

I am sick of seeing countries 25 times smaller have more electricity and money and bigger economy than Pakistan!!!

 

[H!TchHiker]

I am sick of seeing countries 25 times smaller have more electricity and money and bigger economy than Pakistan!!!

Unfortunately we are one of the most corrupted state in the world. We do have resources but not the will.Pakistan is wasting enormous amount of $15 billion every year due to prevailing corruption as well as the menace of corruption is one of the top most hurdle in doing business.
http://www.brecorder.com/top-stories/0/1173099/

 

[Rizwan Alam]

How much Indian government is charging for withdrawing the money from your own account??

 

[EpiiC]

How much Indian government is charging for withdrawing the money from your own account??

@Indian Members How much Indian government is charging for withdrawing the money from your own account?

 

[NHUDA]

Modi in 2 years made his population 250M bank accounts.... Pak can take some gradual steps towards this....

Sure ... We need to look into making people come into Tax bracket .. work for making economy less cash dependent ... but need to be sure tht steps are gradual, consistent and long lasting .. and start from Top Down .. rather thn trying Magic Wand solutions !

 

[ADITYA MAYUKH]

@Indian Members How much Indian government is charging for withdrawing the money from your own account?

not a penny,we get returns on our savings at a rate of 4% per year.

 

[livingdead]

SoulSpokesman,

Friend they aren't as short sighted as Pak Leaders ..... The Minister for Finance Senator Mohammad Ishaq Dar has dispelled the rumors about the demonetization of Rs. 5000 currency notes and withdrawal of Rs.40,000 prize bonds.
In a statement issued by the Ministry of Finance, the minister said that these rumors are totally baseless and are spread by the vested interest for ulterior motives.He further said that even no such proposal is under consideration of the government.

Earlier on Friday, Pakistan Peoples Party Senator Osman Saifullah Khan had submitted a resolution in the Senate, seeking withdrawal of Rs 5,000 and Rs 1,000 currency notes to reduce illicit money flows and encourage people to use banking services.

“The house urges the government to take steps to withdraw from circulation as legal tender the high denomination Rs 5,000 and Rs 1,000 notes so as to reduce illicit money flows, encourage the use of bank accounts and reduce the size of undocumented economy,” reads the resolution. Indian Prime Minister Narendra Modi announced the demonetization of Rs 1,000 and Rs 500 banknotes, making these notes invalid in a major assault on black money, fake currency and corruption.

I am not convinced that banning big notes helps.. Modi banned 1000 rs but brought 2000 Rs. All that will happen is, corrupt people will keep the black money in gold or dollars(or similar high value foreign currency)... but you will increase the cost of transaction(your reserve bank will have to print many more notes)... unless you can achieve high level of digital transaction it is going to make things worse.

@Indian Members How much Indian government is charging for withdrawing the money from your own account?

govt does not charge anything.. banks might charge(20 rs around) for transaction if you are using another bank's ATM... this was introduced a few years ago due to high cost of ATM transaction...

 

[Deadpool]

How much Indian government is charging for withdrawing the money from your own account??

Nothing.
Why would they charge us for withdrawing money?