Wednesday, February 23, 2011

Tax-matic: cheating taxes in Pakistan

Injured in Pakistan EarthquakeImage by United Nations Photo via FlickrThe Federal Board of Revenue in Pakistan has revealed that for every 100 rupees it collects in tax, it looses another 70 rupees due to tax evasion. The government estimates that tax evasion stands at about 8% of the GDP.

This is an alarming figure for Pakistan where the sum of all taxes equals almost 10% of the GDP. This is contrast to other advanced governments where the tax revenue represents between 30% to 40% of the GDP. India, where taxes account for 17% of the GDP is in far better condition than Pakistan.

The key to get to tax cheats is to impose taxes on consumption and not income. Start with real estate. Those living in million dollar palatial homes in Pakistan cannot lie about the riches they hide. Every brick of their large home and every litre of gasoline poured into their luxury SUVs will expose their tax lies.

Lost revenues: ‘Tax evasion costs exchequer Rs1.27tr’ – The Express Tribune
Enhanced by Zemanta

No comments:

Post a Comment