Pakistan $1 Trillion Economy

[Transhumanist]

He is talking about the regular economy + the unaccounted for economy being over a trillion. Although I don't know whether that is true or not. What I do know is that if many Pakistani citizens began paying the correct income taxes including businesses then GDP will sky rocket as government revenue and spending would multiply.

And that's valid in every economy. If (a big if) people pay their taxes - or the correct amount for their income bracket (assuming Pakistan has one and not a flat rate or percentage), if they don't off-shore their earnings and investments, I don't disagree that a lot of Pakistan's economy is unaccounted for considering all economies face the same problems - the US is updating its GDP measuring to account for new metrics like weather-adjustment in the face of persistent down-ward first quarter pressure from adverse weather, my problem is with claims and their lack of supporting data. That's it.

Most, if not all economies face the same scenario, unfortunately, the reality is the same for everyone and a tax not paid is a tax not earned by the state, and thus a tax that's not counted in economic figures.

It's hypothetical claims, a tax not paid is a tax not paid, you can't count it in GDP if you don't earn it, otherwise the US and China would be even stronger. But they aren't, since they don't count unaccounted for taxes in their economic assessments, we shouldn't either when ascribing a value to an economy - unless we are doing so hypothetically.

 

[Norwegian]

probably another 100 years or more!

 

[A1Kaid]

And that's valid to every economy. If (a big if) people pay their taxes - or the correct amount for their income bracket (assuming Pakistan has one and not a flat rate or percentage), if they don't off-shore their earnings and investments, I don't disagree that a lot of Pakistan's economy is unaccounted for considering all economies face the same problems - the US is updating its GDP measuring to account for new metrics like weather-adjustment, my problem is with claims and their lack of supporting data. That's it.

Most, if not all economies face the same scenario, unfortunately, the reality is the same for everyone and a tax not paid is a tax not earned by the state, and thus a tax that's not counted in economic figures.

It's hypothetical claims, a tax not paid is a tax not paid, you can't count it in GDP if you don't earn it, otherwise the US and China would be even stronger.

Not all countries have the same problem to the same extent. In Pakistan's case it is very severe issue, same level as Greece, probably worse than Greece. I read a BBC article that reported only 2% of Pakistani population filed income tax in 2013(?) imagine if 50% or 75% of the population paid the right income tax, that would be a tremendous boost of hundreds of billions of USD to the Federal Government in turn boosting GDP because government spending would increase in multitude.

Other countries have a much larger tax net. To Pakistan's credit the current Government is widening the tax net as we speak, more businesses and citizens are being documented and filed and put into taxation. In fact, the recent widening of the tax net is the reason why Pakistan was able to make new defense procurements.

 

[Hyde]

Not all countries have the same problem to the same extent. In Pakistan's case it is very severe issue, same level as Greece, probably worse than Greece. I read a BBC article that reported only 2% of Pakistani population filed income tax in 2013(?) imagine if 50% or 75% of the population paid the right income tax, that would be a tremendous boost of hundreds of billions of USD to the Federal Government in turn boosting GDP because government spending would increase in multitude.

Other countries have a much larger tax net. To Pakistan's credit the current Government is widening the tax net as we speak, more businesses and citizens are being documented and filed and put into taxation. In fact, the recent widening of the tax net is the reason why Pakistan was able to make new defense procurements.

claims a part

The total number of people filing income tax returns decreased this year. So the claims of increasing tax net is proven wrong. The increase in tax revenue is all due to indirect taxes and inflation

 

[A1Kaid]

claims a part

The total number of people filing income tax returns decreased this year. So the claims of increasing tax net is proven wrong. The increase in tax revenue is all due to indirect taxes and inflation

That's not what I have read from multiple sources.

Pakistan has begun chasing wealthy tax-dodgers who enjoy lives of extravagance and luxury, but revenue officials face huge challenges in trying to force the very richest -- and most influential -- to pay up.

Pakistan's tax-to-GDP ratio of 9.5 percent is among the lowest in the world and the government is under pressure from foreign donors and lenders, including the International Monetary Fund (IMF), to increase collection to boost the struggling economy.

Revenue authorities say they have identified about a quarter of a million new taxpayers who they project will add around 14 billion rupees ($140 million) to government coffers.

Link: Pakistan moves to widen tax net, but big fish yet to be caught | Daily Mail Online

Pakistan moves to widen tax net, but big fish yet to be caught - Business Insider

Govt taking steps to widen tax net: PM

 

[Paksanity]

It is impossible to accurately predict economy but I have a question. If, as an assumption, Pakistan wasn't hit with energy crisis and terorrism, and economic policies were same as of today say from PPP era, and rest of World Economic variables same. The question is, could it be possible or likely or plausible that we would be clocking double digit growth right now? I'm trying to figure out how much breathing space we will get if and when these problems are gone. Anyone?

 

[Norwegian]

I have been to Pakistan many times and cannot see much of our exports apart from food products and IT-services. What else is there that could boost our economy?

 

[474474]

Can we estimate the underground economy? I'm just a student so can any economists tell me what the rate is for Pakistan? For poorer countries it can be above 50%

 

[Hyde]

That's not what I have read from multiple sources.



Link: Pakistan moves to widen tax net, but big fish yet to be caught | Daily Mail Online

Pakistan moves to widen tax net, but big fish yet to be caught - Business Insider

Govt taking steps to widen tax net: PM

You will find many articles in favour of Government's performance and against it. It is us who need to analyse the fact from official reports and the actual performance on ground. One example is that IMF estimated Pakistan's GDP will be slowest in whole of subcontinent after Afghanistan and we ignored this fact and only highlighted that IMF is praising Pakistan and estimates stable growth rate of 4.5% or something.

There is a difference between claims and statistics.

For example this article says that 1.44 million people filed tax returns in 2011, that was decreased to 840,000 in 2013.

Addicted to a regressive tax regime - Newspaper - DAWN.COM

There was another article which said only 736,000 (or similar number) people filed tax returns last year. So the more we talk about increasing the tax net, the more we are fooling our nation and actually putting burden on existing loyal tax payers.

 

[RAMPAGE]

Janab app he kyo nahi wazahat farma detay jo app kehna cheh rahay hein.

Cost of services and goods increased by almost 55% in the last 20 years. Your estimate was based on current base year. Change it to 2035 in 2035 and see the magic.

 

[Hurter]

Trust me its more than 1 Trillion already

I really hope so mate.

 

[Indus Pakistan]

All the official figures are garbage.There is always certain amount of slip in the official figures and the reality on the ground. Not everybody declares their true income. That why we call the unofficial economy the 'black economy'.

However what marks out Pakistan is magnitude of tax evasion even by Third World standards. According to FBR figures there are 856,987 taxpayers in Pakistan in a country of 190 million people. That has got to be world record. That is well below 1% paying tax in Pakistan.

Less than 1 percent of Pakistanis pay tax – Survey | Aboard The Democracy Train

Given the monumental incompetance by FBR as demonstrated by the numbers of most of the 856,987 taxpayers will be paying nominal amount of tax and getting away with 'murder'. Therefore Pakistan's tax iceberg is differant from most because larger mass of it is submerged. This is the point to keep in mind and not compare it to Canada, USA or UK. What is the exception in UK is ithe norm in Pakistan.

Anecodotal evidence will show any observer. Everytime I go to Pakistan I see huge housing estates sprouting everywhere and cars, consumer goods on sale which does not even by the slightest fit with what figures I read on papers. So if people are not making money where are they getting the money to spend on cars, houses, phones? I just checked and car ownership rates are higher in Pakistan then India, extreme malnutritution is less in Pakistan then India, sanitation access is better in Pakistan but the crazy gross domestic capita is lower then India.

Does this add up? So if figures are to be believed Indian's make more money but then don't bother buying cars, don't bother feeding their children, don't bother building sanitation facelities but hide the money under the bed ....

Yes of course .....

Cars -

Pakistan - 57
India -18

List of countries by vehicles per capita - Wikipedia, the free encyclopedia
WHO | Fast facts
Indian poverty levels higher than Pakistan's, says UN report - Telegraph

 

[Hyde]

At 5% 2040, at 6-7% 2030-35.

Economy cannot be actually predicted beyond a few years.

oh nai actually you got it wrong. Please don't take the gdp growth rate as interest calculation. You got to keep the inflation factor in mind

For example as per PriceWaterCoopers (PwC) Pakstan's GDP PPP in 2014 is 884 billion dollars also acknowledged by the IMF. It predicts Pakistan's GDP (PPP) will be $1832 billion dollars in 2030 becoming the World's 22nd largest economy in terms of GDP PPP and $4253 billion dollars in 2050 becoming the 15th largest economy by GDP PPP in the world (below France and Turkey).

Now take the calculator out and start calculating, the figures won't match as per your simple method of accruing 5% each year.

http://www.pwc.com/gx/en/issues/the-economy/assets/world-in-2050-february-2015.pdf

China, India To Lead World By 2050, Says PwC | The Diplomat

 

[ghazi52]

.....Enjoy village corn of our village ( KPK ) .......

 

[Indus Pakistan]

@ghazi52

My grandma does that. Why are they so tasty cooked out in the open ...
Make me feel hungry and nostalgic ...
Edit: Are you from Attock ?