How to revolutionize Pakistan's Tax System?

[AZADPAKISTAN2009]

Pakistan has a grand population of 220-250 Million People and it is well known perhaps only 1 Million people pay taxes so clearly there is a process which is broken

When FBR starts closing Bank accounts , people normally withdraw their funds from Bank Accounts and saving funds in alternative areas.

Long Story Short the classical Method of Tax collection is not working.


What Are Alternative Tax Models which might work for PAKISTAN?

STEP 0 : CAPITAL PUNISHMENT OF DEATH FOR TAKING BRIBE WHILE WORKING IN GOVERNMENT CONTRACT DEPARTMENT i.e Depanding bribe or Cut for Projects

STEP 1: NO NEED TO FILE INCOME TAX


"Yes you don't have to now spend time to file anything"

"NO INCOME TAX, YOU ARE TAX FREE "​

No Tax on Medicine or Doctors service

"Income Tax only due if your Yearly income is more then 80 Lakh Pakistan Rupee per year, then you should quietly pay 10% income tax or in other words if you make more then 80,000 USD per year"


STEP 2 : THE TAX WILL BE INTEGRATED INTO DAILY STUFF
a) 25% Tax on Eatable Goods at (National Distribution Center Level)
b) 35 % Tax on Automobile Sale (Imposed at Car Dealership Level /at Port of Entry)
c) 35 % Tax on Motor Bikes (Imposed at Car Dealership Level or at Port of Entry)
d) 30% Sales Tax on Gas Product Purchase

• Creation of Number Plate Renewal Licence yearly for all Cars
• Driver Tests Licencing Courses

e) 35% Tax on Mobile Phone Service (Collected Corporate Level)
f) 35% Tax on Electricity (Collected Corporate Level)
g) 35% Tax no Water Bill (Collected Corporate Level)
h) 35% Tax on Shadi Halls (Collected Corporate Level)
I) 15 % Tax on Property Sale / Exchange of Ownership
j) 45% Tax on FRENCHISE TAX (McDonalds, Pizza Hut, KFC) (Collected Corporate Level)
K) 30% Travel Tax by Airplane / 30 % Train Ticket / 30% Bus (Collected Corporate Level)
L) 30% Tax on Textiles imported from Outside Pakistan
M) 30% Tax on Perishable goods like (Fruit, Vegetable , Wheat)(National Distribution Center Level)


N) FIXED FARM LAND TAX BASED ON ACRES OF LAND OWNED
Simple Tax Format
Farm Land:

• 0-1 Acre Land :Rupee 800 due permonth in property tax
• 1-5,000 Acre Land: Rupee 10,000 due per month in property tax
• 10,000 Acres or more: Rupee 100,000 due per month in property tax

Living Land:

• Poeple who live in Appartments must pay 250 rupee per month Tax
  People who live in Homes must pay 350 rupee per month for property tax

0) 30% Tax on Electronics sale (National Distribution Center Level)

p) Qurbani Baqra sale tax 1,500 rupee per animal registered for sale for qurbani , animal is given permit for qurbani sale

Tax must be collected by state of Pakistan , for making this Halal Sale possible

P) OPEN SHOP TAX FIXED TAX 750 RUPEE / MONTH NEED PERMIT TO OPEN TRADE SHOP fine for not having permit 100,000 Rupees (1 Lakh Rupee)

• Small Shop Keepers who sell eatable goods don't need to pay extra Tax as they already bought their goods as National Distribution Centers , Tax collection already is done at Distribution Level

• Small fruit shop owners who buy from Distribution center need not pay any tax the Tax was already paid at Distribution Cenetr Level

Q) Transport Truck/ BUS / TAXI / RICKSHAW TAX , 500 Rupee per month for permit REGISTRATI0N fine for not having permit 100,000 Rupees (1 Lakh Rupee)

R) Corporate Tax on IT , Sugar Mills , Steels Mills, Petrol Company , Fertilizer company , food company , Manufacturing segment, Banks stays as is where corporate Taxes are collected

S) AIRPORT TAX : Visitors Landing in Pakistan (Airports) must pay 1000 Rupee Tax , the funds collected with help security at airports







ZAKAT CHARITY
(Not mandatory Up to you if you wana go to heaven)

(Donation Limit 500 Rupees to ?????)

• Deposit Funds to Government of Pakistan's Bank Account for Zakat National FUND

• Government will then distribute Charity for registered Centers/Mosques

• Government Sponsored Wellness programs to fight poverty

Oh ..

• Forgot if you are sending funds from Middle East , Europe , North America to Pakistan 0% Tax on that fund provided the fund is between 0-3,000 USD

• Anything over 3,000 , 1.5% tax would be applied

This is it ...

• NO RESTRICTION TO MOVE MILLIONS INTO PAKISTAN FOR BUSINESS OR OUT only restriction is you need to show you are legal Business in Pakistan.

 

[Army research]

Pakistan has a grand population of 220-250 Million People and it is well known perhaps only 1 Million people pay taxes so clearly there is a process which is broken

When FBR starts closing Bank accounts , people normally withdraw their funds from Bank Accounts and saving funds in alternative areas.

Long Story Short the classical Method of Tax collection is not working.


What Are Alternative Tax Models which might work for Pakistan?

STEP 1: NO NEED TO FILE INCOME TAX


"Yes you don't have to now spend time to file anything"


STEP 2 : THE TAX WILL BE INTEGRATED INTO DAILY STUFF
a) 25% Tax on Eatable Goods at (Distribution Center Level)
b) 30 % Tax on Automobile Sale (Imposed at Car Dealership Level /at Port of Entry)
c) 30 % Tax on Motor Bikes (Imposed at Car Dealership Level or at Port of Entry)
d) 25% Sales Tax on Gas Product Purchase

• Creation of Number Plate Renewal Licence yearly for all Cars
• Driver Tests Licencing Courses

e) 35% Tax on Mobile Phone Service (Collected Corporate Level)
f) 30% Tax on Electricity (Collected Corporate Level)
g) 30% Tax no Water Bill (Collected Corporate Level)
h) 30% Tax on Shadi Halls (Collected Corporate Level)
I) 4% Tax on Property Sale / Exchange of Ownership
j) 30% Tax on Foreign Frenchises (McDonalds, Pizza Hut, KFC etc)(Collected Corporate Level)

This system is very flawed, the reason being that the rich would have no trouble paying these taxes at all but the poor will suffer too much and would be crippled, Thus a system in which the rich have heavy income and profits taxes and poor go tax free so they too one day become rich would be better

 

[Indus Pakistan]

Long Story Short the classical Method of Tax collection is not working.

The solution is having a Islamic tax system/.

 

[AZADPAKISTAN2009]

No need to worry Pakistan will Pay Zakat , people just need to focus on the tax on every day stuff


ZAKAT IS DUE ON PAKISTAN as it is taking loan from IMF

 

[Arbiter]

I am not familiar with Pakistan's tax system - but it is clearly not working. Personally I would like that:
1. Tax number be the same as NADRA-ID. If you are not paying taxes, your ID card is deactivated.
2. Move towards digital payment. Withdraw and demonetize all high denomination notes from 100 Rs and above. This will make it much harder for the rich to hoard money and will also encourage digital payment.
3. Value added tax. The more properties and the size of land you own, the higher the tax you have to pay. This to discourage the wealthy from owning multiple properties and buying huge land areas. This will overall reduce prices and make it more affordable for the poor to buy a house or small land.
4. Tax luxury items. Remove all kind of tax from essential commodities like foodstuff (except for garbage like McDonalds, KFC etc), medicines, fuel etc.
5. Tax bank transactions, 1 % for each transaction. This coupled with digital payment will lead to banks having more money to loan out. Also make a law that requires banks to guarantee up to a fixed amount of money back to its customers in case of defaulting or bankruptcy, to discourage banks from high-risk taking initiatives.

 

[Nilgiri]

The solution is having a Islamic tax system/.

I am curious, what is the level stipulated, is it to be enforced or simply recommended....and is there a threshold it is supposed to kick in at (or left open to personal free will/choice etc)?

I like having no authoritarian system of tax (Esp on individuals), but only community charity towards socio-economic causes using the institutions of long established order (be it religion etc).

For that which a community is inadequate in providing, a govt exists to provide security (foreign and domestic), courts (law and standards) and overall larger administration + mass use infra (and even the latter is somewhat debatable).

It should only focus on those aspects and I suppose can extract only from means of production/larger enterprise to finance itself at some rate....and only spend what it can collect this way. All of these sectors are ones where each citizen essentially puts in what he can also benefit from equally ....the problem always starts when govt acts as a conduit to forcibly transfer from perceived haves to have nots, for some optic of its version of "social good" in return for captive votes, political propaganda etc....and ends up messing up badly in the long run the actual function, role and permeation of the free-market.

Would like to hear everyone thoughts on this.

@Joe Shearer @Desert Fox @Zibago @django @Chak Bamu

 

[Desert Fox]

the problem always starts when govt acts as a conduit to forcibly transfer from perceived haves to have nots, for some optic of its version of "social good" in return for captive votes, political propaganda etc

I share this view as well. I am in favor of a free market type system but one where certain boundaries are set (therefore I guess not exactly a "free" market in the literal sense). Healthy competition is good for society and progress. But the main purpose of a state should always be to ensure the well-being of its citizens not only materially but also spiritually, otherwise you end up with a decadent consumerist society like in the modern West where people end up inventing faux-spiritualities like Holocaustianity, muh-slavery reparations, muh-anti-colonialism, etc...

 

[AZADPAKISTAN2009]

We need to capture 95% base first

a) Small shop owners (100,000-500,000+ shops)
b) Small business (Mechanics, Flower shops, Lawyers, Doctors, Technician, Engineer etc)
c) People who don't pay tax
d) Middle class who don't feel anything will happen by avoiding taxes
e) Thousand of gas stations
f) Thousand of Buses / Taxies / Rickshaws (10-20 Million vehicles on road)
g) The untapped tax on Qurbani animals
h) People buying cars / motor cycles
i) Pople buying goods 7 days a week (200 Million people buying food daily)

That is possible by means of integrating tax prices into Goods

The rest is up to you ... you want to enjoy Luxury you have to Pay for every Luxury you enjoy


The second Phase is Tax on Land

a) Farm Land (1 Acre to 100,000 Acres)
b) Residential Land (Home / Appartment) (100,000-500,000+ homes or appartments)


Third phase
To allow Business community to bring back funds into Pakistan Overseas in /out at will


And really all 3 Phases should be done same time

 

[Syed1.]

Implement direct taxes.... this BS of indirect taxes hardly works. Most countries that have a flourishing tax system implement direct taxation.

Tax strategy:

1. If you are older than 18 years old, it is mandatory that you have a bank account.
2. Illegal to pay wages in cash. Wages will only be paid in direct bank transfer or by cheque.
3. All small/medium/large retail businesses to register with FBR and have their bank accounts linked with their registered tax numbers. FBR should know how much a business earned in a given year.
4. Remove tax exemptions for all ladlay sections of society. The amount of tax you pay will only be calculated based on your income and no other criteria.


Tax scheme:

1. Monthly income less than Rs. 100,000, zero income tax
2. Monthly income between Rs. 100,001-200,000, 15% income tax
3. Monthly income between Rs. 200,001-500,000, 30% income tax
4. Monthly income greater than Rs. 500,001, 50% income tax



Implement this then you will be able to reduce the thousands of indirect taxes that only hurt the lower income groups.

 

[Yaseen1]

tax on necessary food items will affect poor severely.only luxary food items should be taxed and no need to impose tax on basic food items necessary for existence.real estate sector should be taxed more and people owning more than one house or land for realestate purposes should be taxed highly

 

[Śakra]

So you want the poor to shoulder the burdeon of state taxes?

 

[imrankhan7250]

Our tax system can be revolutionized if we adopt a bottom up approach instead of top down.
At present we collect the taxes at Central level and then share these with provinces at 48:52.
If we allow our provinces, even districts to collect taxes and send up the share it will make our tax system
1. More efficient
2. Our provinces will be more independent
3. No distrust between the provinces and center
4. Collect more taxes without imposing new.

 

[Samlee]

We need to capture 95% base first

a) Small shop owners (100,000-500,000+ shops)
b) Small business (Mechanics, Flower shops, Lawyers, Doctors, Technician, Engineer etc)
c) People who don't pay tax
d) Middle class who don't feel anything will happen by avoiding taxes
e) Thousand of gas stations
f) Thousand of Buses / Taxies / Rickshaws (10-20 Million vehicles on road)
g) The untapped tax on Qurbani animals
h) People buying cars / motor cycles
i) Pople buying goods 7 days a week (200 Million people buying food daily)

That is possible by means of integrating tax prices into Goods

The rest is up to you ... you want to enjoy Luxury you have to Pay for every Luxury you enjoy


The second Phase is Tax on Land

a) Farm Land (1 Acre to 100,000 Acres)
b) Residential Land (Home / Appartment) (100,000-500,000+ homes or appartments)


Third phase
To allow Business community to bring back funds into Pakistan Overseas in /out at will


And really all 3 Phases should be done same time

This Is My Field Of Study And I Can Give You Much Better Proposals If You Don't Mind

 

[I.R.A]

Tax scheme:

1. Monthly income less than Rs. 100,000, zero income tax
2. Monthly income between Rs. 100,001-200,000, 15% income tax
3. Monthly income between Rs. 200,001-500,000, 30% income tax
4. Monthly income greater than Rs. 500,001, 50% income tax

So basically you want a guy who earns suppose say PKR 500,001 ...... to take home (way) less than the guy who earns PKR 500,000. Your slabs are ridiculous.

 

[!eon]

You already have more than enough accumulation of taxes and people even don't know. Pakistan's problem is not the collection of taxes but misuse of state's money.
You have to use the governmental incomes properly, without corruption.

Your real problem is your corrupt leadership. I don't mean only NS and co, but all politicians, civil and military bureaucracy.

With this corrupt system in place, even if you get 99% back from your public earned incomes, you will remain a poor third world country. Because your state's money goes into anonymous foreign accounts and anonymous shadow companies, owned by your politicians and bureaucracy.