Karachi contributes Rs 16 billion to GDP a day

[z9-ec]

Again the debate of earning at source or at collection is being brought into the context. The debate is whether the tax revenue is generated by manufacturing plant who produces and sells but is located at a locality other than Karachi, or the head office which consolidates the revenues and deposits tax with government, and is located in Karachi. For example if a consumer loads the 100PKR card of U-Fone in Sukkur and pays 16 Rs tax on that but the Tax is deposited with government by U-Fone Office located in Karachi.The Revenue generation is done by Sukkur by collected at Karachi. And a lot of people don't understand this, even Dr Salman Shah once said that 70% of tax revenue is contributed by Karachi (which is actually collected and deposited).

You are to some extent correct. However, just to get an idea of how big Karachi's industry is search SITE and 4 other industrial zones in Karachi on google maps. Getz Pharma, GlaxoSmithKline, Merck, Adamjee, Waves, Dawlance and etc.

The fact remains Karachi contributes 70% of Pakistan's revenue yet we are deprived of developmet.

again nonsensical figure being used.

How is that not making sense? 80% are from Karachi and manufacture in Karachi and Sindh.

These numbers mentioned in the article are from FBR (Federal Board of Revenue).

how can i make you believe

Only textile industry of Faisalabad constitutes more than 70% of total textile exports of. Pakistan which have a share of 68% in total Pakistan exports. ... 50000 weaving units with more than 400000 weaving looms of different types.

http://www.google.com.pk/url?sa=t&rct=j&q=the%20textile%20industry%20of%20faisalabad%20constitutes%20more%20than%2070%25%20of%20the%20textile%20export%20market%20of%20pakistan%2C%20which%20itself%20forms%2068%25%20of%20total%20exports%20from%20pakistan&source=web&cd=6&ved=0CD0QFjAF&url=http%3A%2F%2Fwww.smeda.org%2Fdownloads%2FCluster_Profile_LightEngineering.pdf&ei=7z2DT7WGIsTrOf2_6JMH&usg=AFQjCNGET4S8Y_n3cX0wTRMl3cCpduovzg


read this report of SMEDA do you trust this source or not ???

Textiles are not GDP.

GDP = government spending + consumer spending + foreign investment + (exports - imports)

i am not saying khi is not important part of pakistan its the gateway of pakistan and financial capital but its not fair to say that karachi is feeding whole pakistan and rest of country is just enjoying on it . Karachi is hub of pakistan economy while Punjab is Engine of Pakistan's economy

IF that were the case then why does the 'engine' start to lose billions of rups a day when Karachi is at a standstill? this is not according to me but none other than FBR.

 

[SBD-3]

You are to some extent correct. However, just to get an idea of how big Karachi's industry is search SITE and 4 other industrial zones in Karachi on google maps. Getz Pharma, GlaxoSmithKline, Merck, Adamjee, Waves, Dawlance and etc.

Again my point is about collection, let me try to simplyfy it further
Price of product= Cost (Factor payments) + Profit (enterprenure's payments)+ Tax (Consumer's payment to government)
Where
Factor Payments= Wages of worksmen, payments to local suppliers etc
Profit= Reward for producer
So effectively when a thing is sold by any producer, be it in Sind, Balochistan, KPK or Punjab, its investment and reward for local resources is paid by the consumer in the shape of price. The Tax however, is not the reward for the producer but a contribution by the consumer to the government, which is independent of production since producer as well as factors of production are paid in the shape of price. Thats where the debate of collection kicks in, the contribution is made by a consumer residing in a locality A. But since the tax is collected by the producer in locality B on behalf of the government and then deposited with it, that is the point of collection.

These numbers mentioned in the article are from FBR (Federal Board of Revenue).

FBR figures are again about tax amount, the author hasn't given any idea how much of this revenue was generated from where.

Textiles are not GDP.

GDP = government spending (zilch in karachi) + consumer spending + foreign investment + (exports - imports)

That is very gross indeed
Textiles= local consumption+ Exports
GDP = government spending + consumer spending (Textiles) + foreign investment + (exports (Textile)- imports)
GDP= F(local textiles consumption, textiles exports)

 

[z9-ec]

Again my point is about collection, let me try to simplyfy it further
Price of product= Cost (Factor payments) + Profit (enterprenure's payments)+ Tax (Consumer's payment to government)
Where
Factor Payments= Wages of worksmen, payments to local suppliers etc
Profit= Reward for producer
So effectively when a thing is sold by any producer, be it in Sind, Balochistan, KPK or Punjab, its investment and reward for local resources is paid by the consumer in the shape of price. The Tax however, is not the reward for the producer but a contribution by the consumer to the government, which is independent of production since producer as well as factors of production are paid in the shape of price. Thats where the debate of collection kicks in, the contribution is made by a consumer residing in a locality A. But since the tax is collected by the producer in locality B on behalf of the government and then deposited with it, that is the point of collection.

FBR figures are again about tax amount, the author hasn't given any idea how much of this revenue was generated from where. [

As I said you maybe correct to some extent. Ragardless, the fact remains the revenue is deposited at Karachi's LTU (Large Tax Unit) as far as I know there are 4 or 5 LTUs one being in Lahore the highest contributor is Karachi LTU.

The reason Lahore LTU does not contribute is because there is NO agriculture tax. Punjab is largely based on agriculture. The jageerdar waderas Sharifs, Chaudarys and etc pay ZILCH - NADA - NONE to Pakistan go as far to evade tax as much as possible. Where as result of this burden lands on Karachi LTU.

That is very gross indeed
Textiles= local consumption+ Exports
GDP = government spending + consumer spending (Textiles) + foreign investment + (exports (Textile)- imports)
GDP= F(local textiles consumption, textiles exports)

Glad you mentioned this. Have you heard of Gul Ahmed Textiles? one of Pakistan's biggest textiles company.

Gul Ahmed Textile Mills Limited - Wikipedia, the free encyclopedia

 

[aks18]

You are to some extent correct. However, just to get an idea of how big Karachi's industry is search SITE and 4 other industrial zones in Karachi on google maps. Getz Pharma, GlaxoSmithKline, Merck, Adamjee, Waves, Dawlance and etc.

The fact remains Karachi contributes 70% of Pakistan's revenue yet we are deprived of developmet.




How is that not making sense? 80% are from Karachi and manufacture in Karachi and Sindh.

These numbers mentioned in the article are from FBR (Federal Board of Revenue).





Textiles are not GDP.

GDP = government spending + consumer spending + foreign investment + (exports - imports)



IF that were the case then why does the 'engine' start to lose billions of rups a day when Karachi is at a standstill? this is not according to me but none other than FBR.

i was talking about revenue generation

As I said you maybe correct to some extent. Ragardless, the fact remains the revenue is deposited at Karachi's LTU (Large Tax Unit) as far as I know there are 4 or 5 LTUs one being in Lahore the highest contributor is Karachi LTU.

The reason Lahore LTU does not contribute is because there is NO agriculture tax. Punjab is largely based on agriculture. The jageerdar waderas Sharifs, Chaudarys and etc pay ZILCH - NADA - NONE to Pakistan where as the result of this burden lands on Karachi LTU.


Glad you mentioned this. Have you heard of Gul Ahmed Textiles? one of Pakistan's biggest textiles company.

Gul Ahmed Textile Mills Limited - Wikipedia, the free encyclopedia

have you heard of Nishat group ??? its head office is located in lahore

Nishat Group - Wikipedia, the free encyclopedia

n have you heard about Sitara , cresent group of textile n there is huge number of list of textile millns in faisalabad which are 70% of total exports of textile products

 

[z9-ec]

i was talking about revenue generation




have you heard of Nishat group ??? its head office is located in lahore

Nishat Group - Wikipedia, the free encyclopedia

Yes, indeed I have.

Why not go through this list?
List of companies of Pakistan - Wikipedia, the free encyclopedia

The services sector accounts for 50% of Pakistan's GDP. All companies associated in this sector earn revenues and are based in Karachi.

http://en.wikipedia.org/wiki/Tertiary_sector_of_the_economy

 

[aks18]

Yes, indeed I have.

Why not go through this list?
List of companies of Pakistan - Wikipedia, the free encyclopedia

these companies are having there head offices in khi cz its a business hub of pakistan while major chunk of exports are being done by faisalabad alone even sialkot is having 7% share in total exports of pakistan which are almost 900 million dollars approx 1 billion dollars, pakistan's economy is based on agricultural products and punjab is the main source of agriculture which make pakistan 5th largest producers of mango , Milk , wheat , oranges , rice , sugar cane , cotton etc

Yes, indeed I have.

Why not go through this list?
List of companies of Pakistan - Wikipedia, the free encyclopedia

The services sector accounts for 50% of Pakistan's GDP. All companies associated in this sector earn revenues and are based in Karachi.

Tertiary sector of the economy - Wikipedia, the free encyclopedia

karachi just simply collects revenue thats why sindh demanded nfc award on revenue collection not generation

 

[z9-ec]

these companies are having there head offices in khi cz its a business hub of pakistan while major chunk of exports are being done by faisalabad alone even sialkot is having 7% share in total exports of pakistan which are almost 900 million dollars approx 1 billion dollars, pakistan's economy is based on agricultural products and punjab is the main source of agriculture which make pakistan 5th largest producers of mango , Milk , wheat , oranges , rice , sugar cane , cotton etc

That is incorrect.

Services sector accounts for majority of our GDP thereby nullifies your argument.

EDIT: forgot to mention Pakistan's invaluable assets Port Qasim and Karachi Port.

 

[chitti]

most of pak's hindus are in karachi and karachi is the biggest GDP generator.

 

[darkinsky]

i am not saying khi is not important part of pakistan its the gateway of pakistan and financial capital but its not fair to say that karachi is feeding whole pakistan and rest of country is just enjoying on it . Karachi is hub of pakistan economy while Punjab is Engine of Pakistan's economy

if punjab is the engine of pakistan's economy than balochistan is the fuel in the engine, which means no engine workwithout feul(naturaol gas)

 

[Sugarcane]

Here are the latest figures of tax revenues of current fiscal year (2011-12) up to march

Tax Type	Amount (m)	%	Who actually bear the burden
Direct Taxes	473,648	37.41%	Major chunk comes from withholding tax (it was 41% in 2008 now it will be more or less than 50% as more segments are included in recent years) and mostly consumer contribute in it for example when you load charge in your phone, when you withdraw cash more than a certain limit etc. companies deduct this from income tax at the time of filling annual income tax but consumer don’t claim it
Sales Taxes	563,324	44.50%	Consumer
Excise Duty	81,041	6.40%	Consumer
Customs	148,025	11.69%	Consumer
Total	1,266,038

So approximately 80% of taxes are paid by consumer, remaining 20% is income tax paid by employees and employers of all Pakistan. So, Karachi’s own tax contribution to federal revenue is income taxes (20% - Other Tax Units - Baluchistan - Other cities of sindh). Companies pay Port-handling charges & Sindh Excise Duty on imports and this revenue go to Sindh govt. not federal govt. but on other hand companies pass on this burden to consumer.

And there is no way that Karachi is consuming 70% of goods & services and there is no way that Karachi is feeding all Pakistan. On other hand everyone is aware that there is millions of tax revenue drainage due to corruption and Karachi is the largest collection point, so it’s share is also large in this loss of peoples hard earned money.

Only public listed companies, private MNCs and few good local companies pays their taxes honestly or the employees. Small private business, retailers and service provider don’t even bother to file their tax return. National Revenue is allocated to provinces and provinces allocate funds to city. If you go buy actual contribution than obviously Punjab has largest consumer base than all other provinces and contributes larger share but still after revision of nfc award we agreed to give from our share. If any stupid want to allocate revenues based on Tax collecting units than all revenue have to be allocated to three cities Karachi, Islamabad and Lahore.
We need revolutionary tax reforms include everyone in tax net including agriculture and royalties being given on natural resources. Transparent tax collection and it’s better that taxes must be deposited to respective tax office of each province where products/services are being sold. It will clear lots of misunderstanding in minds of people.

We are being ruled by idiots who didn’t bother to develop multiple industrial cities and ports and today 180 million people are dependent on one city and being blackmailed by some opportunists. Need of the hour is that make stabilize Baluchistan and make Gawadar operational as soon as possible and diversify import and exports, develop new industrial zone and encourage investors by giving facilities and tax discounts and develop new ports wherever possible.

About natural resources which are being consumed and consumer is paying the price, let’s take example of gas. Gas SSG, SNG are extracting and selling this to consumer. They pay the royalty, subtract expense and profit is contributed to federal revenue as contribution of respective province and every province is getting it’s share from federal funds based on devised formula. So – again if Punjabis are consuming resources than they are paying price for it.

 

[aks18]

That is incorrect.

Services sector accounts for majority of our GDP thereby nullifies your argument.

EDIT: forgot to mention Pakistan's invaluable assets Port Qasim and Karachi Port.

The economy of Punjab, Pakistan is one that is largely based on agriculture and industry. Punjab is the largest province of Pakistan in terms of population, and also has the largest economy in the country compared to other provinces and administrative units. Punjab's economy has quadrupled since 1972. Its share of Pakistan's GDP was 54.7% in 2000 and 59% as of 2010. It is especially dominant in the Service & Agriculture sectors of the Pakistan Economy. With its contribution ranging from 52.1% to 64.5% in the Service Sector and 56.1% to 61.5% in the Agriculture Sector.


here your services theory also fails dear

Economy of Punjab, Pakistan - Wikipedia, the free encyclopedia

 

[aks18]

if punjab is the engine of pakistan's economy than balochistan is the fuel in the engine, which means no engine workwithout feul(naturaol gas)

no province can survive with out each other .

 

[aamerjamal]

about 70% goods theory, i think its fact, or twisted fact, becuase 1. karachi has port 2. the biggest whole sale market. may be this theory is comes from this market.

 

[Last Hope]

I dunno what the hush is about. The facts and figures are all true, and yes it hurts Pakistan's economy deeply when there are riots going on and similar stuff. The reason political mafias are strongest in Karachi is because of the potential they have to halt most of the trading being done.

 

[Edevelop]

Lets just say that Pakistan is quite reliant on revenue from Karachi and natural resources from Baluchistan.

Aren't you forgetting agriculture from Punjab??