Only 900,000 people pay taxes in Pakistan: Mandviwalla

[Spring Onion]

Please include me i pay hefty incomtax

 

[Sugarcane]

Vat tax should be 20% as its Favored by business But corporate Rate should be around 15% not 35% that can only be achieved by bringing more people in the tax net.

Dude - I guess Sales Tax is 17% and Excise duty is 1% total 18%, Indirect taxes (i.e. Sales tax) must be decreased and direct tax/income tax must increased and nobody should be exempted from income tax. If you increase sales tax than it will be you who will be paying it.

@Topic, I think 900K are people who have NTN not total tax payers, because majority of salaried person don't have NTN (as it's not mandatory) but they pay tax. but again salaried persons are minority.

 

[Developereo]

Pakistan Income Tax Rate=20%

Pakistan Corporate Tax Rate=35%

Pakistan Sales Tax / VAT Rate=16%

This is bad.

Tax should be weighed more heavily towards income/property taxes.

Sales tax should be low because it tends to hit poor people the most (as a percentage of their income).

 

[AZADPAKISTAN2009]

Perhaps another thing they should do is make it mandatory to file taxes

Otherwise you are NOT allowed to vote

That should fix the politicians and their supporters

 

[illusion8]

High sales tax / VAT causes higher inflation, reduces sales - reduces productivity, and makes your product less competitive locally as well as globally.

 

[Cheetah786]

Why would corporate's prefer such a high VAT? our's is 4%, personal income tax is 35%, corporate tax starts from 32%.

Value-added tax falls under the general category of a consumption tax, meaning taxes on what people buy rather than on their earnings, savings, or investments. VAT has also been referred to as a sort of national sales tax, though it functions very differently. Sales tax is imposed on the total retail price of the item sold, while VAT tax is imposed on the value added at each stage of production and distribution. And though more complicated than sales tax, value-added tax systems have more checks against tax fraud because the tax is assessed at more than one point in the distribution process.

The process of assessing value-added tax occurs roughly as follows:

Manufacture adds value to a product; the amount of value added can be described as the difference between the cost of the materials used to make the product and the price charged to the customer (often a wholesaler).
The manufacturer pays value-added tax (a percentage of the value added), which is then included in the purchase price charged to the customer (wholesaler).
The manufacturer gets a rebate from the government for VAT paid on the materials.
The customer (wholesaler) pays a VAT on the value they add, which can be described as the difference between what they paid to the manufacturer and the price they at which they sell it to their customer (retailer). This VAT amount is included in the price charged to the retailer.
The wholesaler gets a rebate for VAT from the government for the VAT paid to the manufacturer.
The retailer pays value-added tax on the value they add, which can be described as the price charged to customers less the wholesale cost, and includes the VAT in the final sales price of the product.
The retail store collects value-added tax from the person buying the product (retail price thus includes all VATs collected at each stage of this process) and gets a rebate for the VAT paid to the wholesaler.

Value-added tax is a primary source of tax revenue in many European and other developed countries. With the exception of the United States, all countries of the Organization for Economic Cooperation and Development (OECD) use a VAT or similar tax on consumer expenditures. Though a value-added tax system has not been extensively used in United States, some presidents have examined the idea.

 

[illusion8]

Value-added tax falls under the general category of a consumption tax, meaning taxes on what people buy rather than on their earnings, savings, or investments. VAT has also been referred to as a sort of national sales tax, though it functions very differently. Sales tax is imposed on the total retail price of the item sold, while VAT tax is imposed on the value added at each stage of production and distribution. And though more complicated than sales tax, value-added tax systems have more checks against tax fraud because the tax is assessed at more than one point in the distribution process.

The process of assessing value-added tax occurs roughly as follows:

Manufacture adds value to a product; the amount of value added can be described as the difference between the cost of the materials used to make the product and the price charged to the customer (often a wholesaler).
The manufacturer pays value-added tax (a percentage of the value added), which is then included in the purchase price charged to the customer (wholesaler).
The manufacturer gets a rebate from the government for VAT paid on the materials.
The customer (wholesaler) pays a VAT on the value they add, which can be described as the difference between what they paid to the manufacturer and the price they at which they sell it to their customer (retailer). This VAT amount is included in the price charged to the retailer.
The wholesaler gets a rebate for VAT from the government for the VAT paid to the manufacturer.
The retailer pays value-added tax on the value they add, which can be described as the price charged to customers less the wholesale cost, and includes the VAT in the final sales price of the product.
The retail store collects value-added tax from the person buying the product (retail price thus includes all VATs collected at each stage of this process) and gets a rebate for the VAT paid to the wholesaler.

Value-added tax is a primary source of tax revenue in many European and other developed countries. With the exception of the United States, all countries of the Organization for Economic Cooperation and Development (OECD) use a VAT or similar tax on consumer expenditures. Though a value-added tax system has not been extensively used in United States, some presidents have examined the idea.

I know what VAT is - we have had that from ages, but as I said...

High sales tax / VAT causes higher inflation, reduces sales - reduces productivity, and makes your product less competitive locally as well as globally.

Hence a reasonable sales tax and a higher personal income tax or corporate would be ideal.

 

[Cheetah786]

Why would corporate's prefer such a high VAT? our's is 4%, personal income tax is 35%, corporate tax starts from 32%.

India said it would seek to impose an additional tax on the country's wealthiest, a move that would put it in the ranks of several developed countries that have raised taxes on the rich.

Indian Finance Minister P. Chidambaram, while announcing the federal budget for the financial year starting April 1, proposed a so-called surcharge that would push the effective income-tax rate for a select group of taxpayers to about 34% from the current 30.9%, according to tax experts. The proposal has to be passed by Parliament before it becomes law.

The additional tax would apply only to those taxpayers who have an annual taxable income of more than 10 million rupees ($186,000). The additional tax would be in force for one fiscal year, through March 31, 2014.

 

[illusion8]

India said it would seek to impose an additional tax on the country's wealthiest, a move that would put it in the ranks of several developed countries that have raised taxes on the rich.

Indian Finance Minister P. Chidambaram, while announcing the federal budget for the financial year starting April 1, proposed a so-called surcharge that would push the effective income-tax rate for a select group of taxpayers to about 34% from the current 30.9%, according to tax experts. The proposal has to be passed by Parliament before it becomes law.

The additional tax would apply only to those taxpayers who have an annual taxable income of more than 10 million rupees ($186,000). The additional tax would be in force for one fiscal year, through March 31, 2014.

edit: you are right it has changed.

India Income tax slabs 2013-2014 for General tax payers and Women
Income tax slab (in Rs.) Tax
0 to 2,00,000 No tax
2,00,001 to 5,00,000 10%
5,00,001 to 10,00,000 20%
Above 10,00,000 30%
India Income tax slabs 2013-2014 for Senior citizens (Aged 60 years but less than 80 years)
Income tax slab (in Rs.) Tax
0 to 2,50,000 No tax
2,50,001 to 5,00,000 10%
5,00,001 to 10,00,000 20%
Above 10,00,000 30%
India Income tax slabs 2013-2014 for very senior citizens (Aged 80 and above)
Income tax slab (in Rs.) Tax
0 to 5,00,000 No tax
5,00,001 to 10,00,000 20%
Above 10,00,000 30%

- In addition an rebate of Rs 2000 will be available for income less than Rs 5 lakhs.
- Income above 1 crore to attract 10% tax surcharge.

 

[Cheetah786]

Dude - I guess Sales Tax is 17% and Excise duty is 1% total 18%, Indirect taxes (i.e. Sales tax) must be decreased and direct tax/income tax must increased and nobody should be exempted from income tax. If you increase sales tax than it will be you who will be paying it.

@Topic, I think 900K are people who have NTN not total tax payers, because majority of salaried person don't have NTN (as it's not mandatory) but they pay tax. but again salaried persons are minority.

1)VAT is applied to the value added to the product from start till the end

2)sales taxes are applied to the complete prices of the product including profits(value added).

 

[Sugarcane]

1)VAT is applied to the value added to the product from start till the end

2)sales taxes are applied to the complete prices of the product including profits(value added).

VAT/GST is ultimately paid by buyer not seller.

 

[BATMAN]

This is bad.

Tax should be weighed more heavily towards income/property taxes.

Sales tax should be low because it tends to hit poor people the most (as a percentage of their income).

Why do you need tax for ? What good does it serve for the person who pay tax?

BTW.. taxes do not reflect, what govt. earns.. actually govt. take international loans, in the name of public..

Musharaf was the first leader in Pakistan's history who broke the circle of debt servicing, he had road map to get rid of international loans in few years time.
Actually, Pakistan started to give loans to poor states, and Pakistani bonds were most sought after in the world.

Alas... some selfish people wanted power and they used lal mosque and iftikhar ch. as a tool, to oust one of best govt. in Pakistan's history.

 

[Mian H Amin.]

HE sounds Information minister more than Finance minister ... why the hell is he giving information ? why dont he wide the tax net ? *** hole.

 

[Pfpilot]

When people from the government speak of the lack of tax collection in Pakistan, it shows the inherent need of the political elites to always be perceived as the victims. Victims of the Pakistani populace. If the politicians are to believed then all of Pakistan's problems could be solved were the people of Pakistan doing their bit for the nation. In their haste to blame the common man, they often overlook the larger failure of the system they prop up.

Pakistan's taxation problem is not as hopeless as the government would have you believe. At some point, someone in the government must take responsibility for some small event within Pakistan. Terrorists in the west are American funded. Balochis are angry for no real reason. Wars are lost because of the wider world conspiracy. People go hungry because no one in the west is funding the industrialization of the farming process. Electricity can't be provided because citizens steal it. The violence in Karachi is apparently caused by the very people dying. As far as the government is concerned, none of it is in their control, which begs the question: what is their reason for existence. Why are the precious few tax dollars collected being wasted in supporting institutions that won't solve the problems they were created to deal with in the first place?

The Pakistani government chooses not to tax a large segment of the population and sectors. The government chooses to not enforce the tax laws. The government in turn is made up of land owners and the ultra rich. Why would they want to change the system and bring upon taxes upon themselves? There in lies the problem. Pakistan has little revenue from taxation because those who make the laws are the ones who don't want to pay. This then puts undue strain on those few that do pay taxes honestly. The corporate and professional middle class is taxed into the ground. To the point that they may as well work for free. Is it any wonder then that such people will want to evade taxes?

The natural inclination of a human and the very mission of a corporation is to maximize profitability. Accountants are taught all over the world to look for loopholes and maximize taxable income for their companies. All of this is considered completely legitimate. So it should not be the responsibility of the Pakistani populace to take blame for doing what every other citizen of every other nation does. If tax laws are weak and not enforced, then it is not the fault of the common man for having taken advantage of them. On the other hand, when those who can change and create these very laws try to avoid paying tax, it becomes increasingly obvious what part of the system is broken.

 

[rubyjackass]

Pakistan Income Tax Rate=20%

Pakistan Corporate Tax Rate=35%

Pakistan Sales Tax / VAT Rate=16%

1. Where taxable income is below Rs. 200,000 0%
2. Where the taxable income is between Rs. 200,000 - Rs. 250,000 0.50%
3. Where the taxable income is between Rs. 250,000 - Rs. 350,000 0.75%
4. Where the taxable income is between Rs. 350,000 - Rs. 400,000 1.50%
5. Where the taxable income is between Rs. 400,000 - Rs. 450,000 2.50%
6. Where the taxable income is between Rs. 450,000 - Rs. 550,000 3.50%
7. Where the taxable income is between Rs. 550,000 - Rs. 650,000 4.50%
8. Where the taxable income is between Rs. 650,000 - Rs. 750,000 6.00%
9. Where the taxable income is between Rs. 750,000 - Rs. 900,000 7.50%
10. Where the taxable income is between Rs. 900,000 - Rs. 1,050,000 9.00%
11. Where the taxable income is between Rs. 1,050,000 - Rs. 1,200,000 10.00%
12. Where the taxable income is between Rs. 1,200,000 - Rs. 1,450,000 11.00%
13. Where the taxable income is between Rs. 1,450,000 - Rs. 1,700,000 12.50%
14. Where the taxable income is between Rs. 1,700,000 - Rs. 1,950,000 14.00%
15. Where the taxable income is between Rs. 1,950,000 - Rs. 2,250,000 15.00%
16. Where the taxable income is between Rs. 2,250,000 - Rs. 2,850,000 16.00%
17. Where the taxable income is between Rs. 2,850,000 - Rs. 3,550,000 17.50%
18. Where the taxable income is between Rs. 3,550,000 - Rs. 4,550,000 18.50%
19. Where the taxable income is between Rs. 4,550,000 - Rs. 8,650,000 19.00%
20. Where the taxable income is more than Rs. 8,650,000 20.00%

OMG!! That is way too less compared to India!! I wonder why people still dont pay taxes.