tag:blogger.com,1999:blog-5848640164815342479.post5129998409763867771..comments2024-03-18T16:01:13.871-07:00Comments on Haq's Musings: Pakistan's Tax Evasion Fosters Foreign Aid DependenceRiaz Haqhttp://www.blogger.com/profile/00522781692886598586noreply@blogger.comBlogger57125tag:blogger.com,1999:blog-5848640164815342479.post-4266652292861764672020-09-19T15:54:19.081-07:002020-09-19T15:54:19.081-07:00Income #tax collection from return filers in #Kara...Income #tax collection from return filers in #Karachi was Rs 573 billion for the tax year 2018 followed by Rs 204 billion from #Islamabad, Rs 200 billion from #Lahore, Rs 35 billion from Rawalpindi, and Rs 16 billion from #Faisalabad. #Pakistan #revenue https://www.brecorder.com/news/40019858<br /><br />The income tax collection from return filers in Karachi remained the highest during Tax Year 2018, followed by Islamabad, Lahore, Faisalabad and Rawalpindi. The Federal Board of Revenue (FBR) has conducted a city-wise tax analysis of the Tax Directory 2018 having data of income tax return filers, and tax deposited in each city for the year ended June 30th, 2018.<br /><br />The FBR has shared tax details of all major cities, small cities and areas adjacent to border areas of Pakistan including tribal areas.<br /><br />The FBR analysis, "Tax Collection from Major Cities" revealed that the income tax collection from return filers in Karachi was Rs572,594,396,386 for the tax year 2018 followed by Rs204,148,673,059 from Islamabad, Rs200,717,435,894 from Lahore, Rs35,170,187,615 from Rawalpindi, and Rs16,264,148,003 from Faisalabad. The city-wise data of Karachi disclosed that administratively, the FBR had divided the coastal city into five areas.<br /><br />Total collection from Karachi stood at Rs572,594,396,386.<br /><br />Breakup of collection from the commercial hub of the country revealed that the tax from Karachi was Rs209,107,138,348; Karachi Central Rs9,059,371,508; Karachi East Rs34,092,500,901; Karachi South Rs114,229,955,253, and Karachi West Rs28,891,487,111.<br /><br />City-wise income tax data revealed that filers from Lahore deposited Rs200,717,435,894 in tax.<br /><br />Breakup of collection from the provincial capital of Punjab reveals that the collection from Lahore was Rs180,580,693,868; Lahore Cantt Rs5,270,469,564, and Lahore City Rs14,866,272,462, during this period.<br /><br />The income tax collection from return filers in Rawalpindi amounted to Rs35,170,187,615 for the tax year 2018. Malir contributed Rs29,374,153,827 as tax from the income tax return filers falling within the jurisdiction of that area.<br /><br />Multan city contributed Rs12,772,888,239, and Sahiwal contributed Rs1,770,291,678 as taxes from the return filers in the area. The income tax collection from Gujranwala city was Rs7,926,264,130, during the tax year 2018.<br /><br />The FBR collected Rs4,499,262,113 from income tax return filers of Sialkot.<br /><br />Tax collection from Abbottabad stood at Rs1,610,871,493, and the FBR collected Rs2,481,243,943 in tax from Bahawalpur.<br /><br />The FBR collected Rs6,357,384,959 tax from Dera Ghazi Khan.<br /><br />From Kohat, the FBR collected Rs1,640,625,913 as tax from the income tax return filers during tax year 2018.<br /><br />Tax collection from North Waziristan Agency was Rs1,119,980, and tax collection from Okara Rs1,081,818,348.<br /><br />The FBR has collected Rs13,643,621,461 from Peshawar during tax year 2018.<br /><br />Collection of tax from Quetta stood at Rs10,052,581,291.<br /><br />As per the FBR data, the tax collection from Sargodha was Rs2,210,683,221, and Rs2,611,985,052 from Sheikhupura.<br /><br />The income tax return filers in Sukkur contributed income tax of Rs3,574,079,338.<br /><br />The city of Haripur contributed Rs1,706,260,030 from the income tax return filers.<br /><br />Total income tax collection from the return filers of Hyderabad amounted to Rs4,065,622,573.<br /><br />Breakup of Hyderabad, as per the FBR data, revealed that Hyderabad contributed Rs2,502,654,699, and Hyderabad City contributed Rs1,562,967,874.<br /><br />The income tax return filers in Taxila contributed Rs1,251,185,013 as income tax during tax year 2018, and return filers in Thatta deposited tax of Rs1,014,821,378 during the period.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-10884916612419468872019-07-07T09:16:39.257-07:002019-07-07T09:16:39.257-07:00Documenting a Country’s Real Estate Economy. 30-40...Documenting a Country’s Real Estate Economy. 30-40% of #Pakistan's #economy is estimated to be undocumented. Pakistan has often been accused of not doing enough to curb #terror-financing from within its borders. #property #gold #PrizeBonds #Tax #FBR #FATF https://foreignpolicyi.org/documenting-a-countrys-real-estate-economy/<br /><br />For too long, Pakistan’s economy has remained largely undocumented and informal. This has caused a lot of trepidation both within the country and internationally. Locally, everyone knows that the country’s real estate sector has been used to park a significant amount of black money as well as launder money. <br /><br />When we say ‘black money’, we do not necessarily refer to the money earned from illegal sources but (as far as real estate is concerned) also that which has not been documented thanks to loopholes in the registering mechanism – caused, of course, by the negligence of the authorities. The people themselves are certainly to blame, too; it suited them to pay much lower taxes than they would have had to after registering their properties at their proper prices. Also, there was nothing actually stopping them from recording their properties at their actual market values. <br /><br />Internationally, Pakistan has often been accused of not doing enough to curb terror-financing from within its borders. Regardless of the government’s willingness to effect some change in the prevalent situation – one overarching issue is that the economy isn’t documented enough to effectively restrain finances from being funneled towards any organization with potential terror links. Again the significant importance of taking account of the undocumented black money and the funds parked in real estate sector becomes evident. <br /><br />All of this has eventually led the government to finally take action on the matter before the current decade sees its closure. <br /><br />In general, for the economy overall, the issues caused by the undocumented economy can be understood this way:<br /><br />The informal economy encompasses the entire economy, as well as that particular sector which is resistant to its advances. Any reforms introduced can be easily bypassed by its instigations, and when 30-40% of the economy is estimated to be undocumented (as is the case in Pakistan), this means that, at the end of the day, the reforms will not really take root. <br />As mentioned above, the informal economy can serve well to hide illicit and downright criminal activities; even more so when the sector is as large as Pakistani real estate, which, according to some estimates, has a volume running in billions of totally unaccounted-for-dollars. <br />Locally, an oft-discussed issue regarding the undocumented economy in general and real estate, in particular, goes along these lines: the authorities have been unable to tax the sector effectively because of its non-rationalized nature. <br />The unregulated nature of the sector has also meant that it is highly uncompetitive and random. The prices have been raised on the basis of mere speculation; hence the preponderance of the frequent ‘bubbles’ that deflate the prices significantly ‘all of a sudden’ after every few years. <br />Two issues attendant to and stemming from the ones mentioned above lead to the market not contributing anything, relatively speaking, to the national economy – when analyzed for its actual size and volume. <br />And, despite such a large amount of investment being poured into the sector, it doesn’t contribute as much to construction (developmental) activity. Most of the money is allocated towards buying and selling land, which, at the end of the day, serves no purpose at all. It is not, then, surprising that Pakistan has a housing shortfall running into millions of rupees.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-74690040976607721672018-02-06T11:00:35.096-08:002018-02-06T11:00:35.096-08:00Loopholes in Pakistani law that facilitate tax eva...Loopholes in Pakistani law that facilitate tax evasion and undocumented economy, according to Haroon Akhtar Khan on Dunya News with Kmran Khan:<br /><br />1. Prize bonds are bearer's certificates....can be used to launder money on which taxes have not been paid. <br /><br /><br />2. Overseas remittances are considered legitimate tax-free income. <br /><br /><br />3. Income can be labeled "agriculture income" which is exempt from income tax<br /><br /><br />4. Anyone with foreign passport or residency permits like iqama can falsely claim to be non-resident (Law says they must spend over 180 days abroad) whose income in exempt from taxes. Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-15427441505489853802016-02-21T16:50:49.930-08:002016-02-21T16:50:49.930-08:00#USAID to spend $ 450m on health, education, ag, e...#USAID to spend $ 450m on health, education, ag, energy, women projects in #Pakistan: director http://www.pakistantoday.com.pk/?p=492255 via @ePakistanToday<br /><br />The United States International Development Agency (USAID) has planned to spend about 450 million US dollars in next American financial year on various projects from education to health and energy to agriculture beside others in Pakistan.<br /><br />This was stated by Mission Director USAID to Pakistan John Groarke while talking to APP on Sunday about projects being executed and planned to be executed by the USAID in various parts of the country<br /><br />He said that the USAID had executed hundreds of projects focusing five major areas – health, education, agriculture, economic growth and energy besides other areas especially women empowerment programme.<br /><br />Responding to a question about agriculture dairy potential, the Mission Director said that Pakistan has a huge dairy farming potential to earn billions of dollars by exporting agricultural and dairy products.<br /><br />Giving examples of agriculture and dairy products, John Groarke said that Pakistan has potential to export a large quantity of mangoes and oranges as these two Pakistani fruits were known worldwide.<br /><br />“Pakistan has capacity to earn billions of dollars by capturing the world market through exporting dairy products and vegetables,” the Mission Director said.<br /><br />Speaking about the importance of Pakistan for USA, the Mission Director said, “Pakistan is an important country for USA and a stable, secure and democratic Pakistan with a vibrant economy is in the national interest of the United States and Pakistan.”<br /><br />According to documents made available to APP about projects of USAID, the United States has demonstrated a continued commitment to Pakistan through Kerry Lugar Berman Act. Since 2009 and the US government has disbursed over 4 billion dollars in civilian assistance in partnership with the Government of Pakistan (GOP), civil society and private sector institutions.<br /><br />The USAID is executing hundreds of projects in various parts of the country and AJK having its offices in Islamabad, Lahore, Peshawar and AJK.Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-14063001566611016102015-06-05T08:34:33.460-07:002015-06-05T08:34:33.460-07:00Mass tax avoidance chokes #Pakistan economy - http...Mass tax avoidance chokes #Pakistan economy - http://FT.com http://on.ft.com/1eOItqc via @FT<br /><br /><br />As an industrialist in Pakistan’s southern port city of Karachi recounts his woes, from frequent power cuts to a shortage of trained workers, his accountant barges in with a question.<br />“Sir, how much should we earn from the farm this year?”<br /><br /><br />“Let me see how much we need to earn from the farm and get back to you,” the industrialist replies.<br />The encounter provides a glimpse of one of Pakistan’s toughest economic challenges: reforming its chronically dysfunctional tax-collection system.<br />Only about 0.5 per cent of Pakistan’s 200m people pay income tax, compared with 2-3 per cent in India and 20 per cent in China, according to the OECD.<br />Compliance with income tax payments is so poor in parts of the country that the cost of running local tax offices exceeds the tax they collect.<br />“Frankly, the government could end up saving money in some of our remote areas if the tax offices there were shut down today,” says one government official.<br />The problem has not been solved by a plummeting poverty rate, which fell from 65 per cent in 1991 to 13 per cent in 2011 according to UN figures released last week.<br />Huge numbers of affluent Pakistanis dodge their tax by colluding with corrupt tax officials to understate their incomes, exploiting loopholes, or both.<br />In one of the most notorious ploys, people buy farmland — for which there is a tax amnesty — then overstate their agricultural income and understate earnings from other business interests.<br />The country’s parliament, dominated by landowners, has blocked attempts by successive governments to remove this loophole.<br />A December 2013 study by the Centre for Investigative Reporting in Pakistan reported that almost half of the country’s 1,070 lawmakers in provincial and national assemblies paid no tax the previous year. More than 10 per cent did not even possess tax numbers.<br /><br />The tax problem, analysts say, risks undermining Pakistan’s recent run of good economic news.<br />Business confidence is on the rise, economic growth has been recovering, hitting 4.1 per cent last year, and official liquid foreign reserves have grown almost fourfold in the past year to $12.5bn. Last month the central bank cut its benchmark interest rate 1 percentage point to 7 per cent and consumer price inflation is about 2 per cent, having been stuck above 8 per cent only a year ago.<br />But plunging oil import costs have played a large part in the upturn. The International Monetary Fund says decisive action on taxation is needed to back up this good fortune.<br />“The tax to gross domestic product ratio is still very low at 10-11 per cent,” says Harald Finger, the IMF official leading discussions with Pakistan on the next instalment of a $6.6bn loan programme. “For vibrant emerging markets, this should be in the 15-20 per cent range.”<br />Ishaq Dar, the finance minister preparing to present his annual budget on Friday, hails the government’s early success in broadening the tax base, boasting a rise of 200,000 taxpayers since mid-2013 to a total of about 900,000.<br />Officials say people have been targeted for whom there was clear evidence of wealth, for example frequent foreign travel.<br /><br />Meanwhile, the country’s ruling elite show few signs of backing reform, according to western economists in Islamabad. “The political system is controlled by people who neither consider tax collection a big priority nor want to do anything beyond lip service,” says one.<br />Back in Karachi, the industrialist does not expect his own tax practices to change in the near future. “Using a farm income to avoid paying your dues is a common practice,” he says. “Pakistan’s ruling class must first change its behaviour before they expect the public to follow.”<br /><br />http://www.ft.com/intl/cms/s/0/f8e27d2a-034c-11e5-8333-00144feabdc0.html#axzz3cCWSvo5eRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-83297239522425610252015-05-06T08:53:32.403-07:002015-05-06T08:53:32.403-07:00The irony: Cost to collect tax higher than tax col...The irony: Cost to collect tax higher than tax collection in many major cities in #Punjab #KPK #Balochistan #Pakistan http://tribune.com.pk/story/881537/the-irony-cost-to-collect-tax-higher-than-tax-collection/ …<br /><br />Out of the 21 formations, only six were collecting taxes, which were more than the total administrative cost and salary of officials serving at these stations. All these stations are located in Lahore, Karachi and Islamabad.<br /><br />About 90% of the Rs64.3 billion was collected in these major cities since all major businesses have their head offices in one of these cities. The three LTUs situated in Karachi, Lahore and Islamabad pooled Rs57.6 billion or 90% of the total assessments.<br /><br />------------<br /><br /><br />Faisalabad is the country’s third populous city and the textile hub. However, the station generated just Rs193.1 million in income tax through FBR’s efforts at a total cost of Rs527.6 million. RTO Multan pooled just Rs77.6 million because of taxmen’s efforts while its administrative cost was Rs523.5 million.<br /><br />---------<br /><br />The RTO Peshawar that deals most of the Khyber-Pakhtunkhwa (K-P) collected a meagre sum of Rs56.2 million at a cost of Rs561.4 million. The other station in K-P, RTO Abbottabad, collected Rs69.6 million through assessment but incurred Rs95.5 million. RTO Quetta collected Rs24.8 million at a cost of Rs86.2 million.<br /><br />RTO Gujranwala – largely capturing the industrial area – collected Rs30.8 million at a cost of Rs317.6 million.<br /><br />RTO Rawalpindi pooled just Rs46.4 million through FBR’s efforts at a cost of Rs417.2 million. RTO Sargodha collected Rs46 million at a cost of Rs187.8 million. RTO Sukkur collected Rs22.4 million at a cost of Rs223.8 million.<br /><br />RTO Sialkot – hub of surgical and supports manufacturing units – collected Rs25.5 million at a cost of Rs240.5 million. Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-47405359745629462842014-04-16T22:26:51.463-07:002014-04-16T22:26:51.463-07:00From VOA report:
The World Bank says that in Paki...From <a href="http://m.voanews.com/a/millions-labor-in-pakistans-informal-economy/1894009.html" rel="nofollow">VOA report</a>:<br /><br /><i>The World Bank says that in Pakistan, roughly 70 percent work in the so-called informal sector, a part of the economy that is unregulated and untaxed.<br /><br />On a good day, Jamil Hassan will have some 15 customers, and earn an average of $8 a day.<br /><br />Hassan is one of the millions working in Pakistan's informal economy, the mainstay for the country's vast poor. He never went to school. Cutting hair is all he knows.<br /><br />"I've been doing this all my life," he said. "My father and grandfather did it before me, so this is what I do."<br /><br />About 40 percent of all workers in Pakistan have no education. Hassan says illiterate people like him will never make enough to be able to save money.<br /><br />Economist Ali Kamal says the informal economy can be seen as helping the country's overall economy.<br /><br />"It absorbs a labor who is otherwise unemployed, it provides services at a cheaper cost and cheaper price to the general public, and it complements the formal sector," he said.<br /><br />Mohammad Naeem works in a modest seasonal wheat mill, when Pakistan's constant power cuts don't grind work to a halt. Naeem says he would like to have his own business. But he doesn't believe in bank loans or in savings.<br /><br />"I feel that people should not take loans, not owe money," he said. "That is very important. You should only use what you earn."<br /><br />Kamal says millions of workers like Naeem and Hassan don't pay taxes, meaning less money for an already cash-strapped state.<br /><br />"If we collect sales tax from all those informal sectors, it may account for four to five percent of GDP, and if we collect four to five percent GDP in sales tax from those informal activities, then we don't have any budget deficit anymore," he said.<br /><br />But as of now, the informal sector is providing cheaper goods, services and labor to the formal sector. Analysts say Pakistan would have to reform its entire economic structure to change the situation</i><br /><br />http://m.voanews.com/a/millions-labor-in-pakistans-informal-economy/1894009.htmlRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-90293981853727163212014-04-14T19:52:03.743-07:002014-04-14T19:52:03.743-07:00Here's a News Op Ed on devolution of fiscal po...Here's a <a href="http://tns.thenews.com.pk/fiscal-devolution/" rel="nofollow">News Op Ed</a> on devolution of fiscal power in Pakistan's constitution:<br /><br /><i>Fiscal devolution involving the transfer of taxing and spending powers to sub-national levels of government is totally non-existent in Pakistan despite clear command contained in Article 140A of the Constitution of Islamic Republic of Pakistan. Pakistan is in dire need of fiscal devolution — presently major fiscal powers are concentrated in the hands of federal government. Even the Constitution denies the provinces right to levy sales tax on goods within their respective territories.<br />The provinces have also shown apathy to devolve administrative and fiscal powers to local governments. Since all broad-based and buoyant sources of revenue are with the federal government, contribution of provinces in total tax revenues is only six per cent and in overall national revenue base (tax and non-tax revenue) just around eight per cent. This has made them totally dependent on the Centre for transfers from divisible pool.<br />What makes the situation more disturbing is the fact that right of provinces to levy sales tax on services is encroached by the federal government through levy of presumptive taxes on services under the Income Tax Ordinance, 2001, sales tax on gas, electricity and telephone services and excise duty on a number of other services.<br />Like other federations — notably India, USA, Canada — in Pakistan the provinces should have the exclusive right to levy indirect taxes on goods and services within their respective physical boundaries. Right to levy any tax on goods should be restored to the provinces as was the case at the time of independence. Despite levying of taxes by the federal government that should have been the provinces’ right, Centre has miserably failed to reduce the burgeoning fiscal deficit that is reaching a horrifying mark of Rs1.8 trillion this year. Had provinces been allowed to generate their own resources, the present chaotic situation could have been averted.<br />------------<br />The provincial parliaments in Pakistan should be pressurised by civil society to enact laws for establishment of local governments as ordained under Article 140A of the Constitution on the basis of social policy — they have so far just copied the previous outdated ones with patchwork here and there. The ruling classes do not want to empower people through self-governance. They want to enjoy total control over resources. The local governments will not be meaningful unless entitled, within national economic policy, to have adequate financial resources of their own, of which they may dispose freely within the framework of their powers and for public welfare.<br />In a nutshell, for achieving the goal of fiscal devolution, local governments’ financial resources must be commensurate with the responsibilities provided for by the constitution and the law to ensure welfare of the people and ensure sustainable growth at grassroots level. Part of the financial resources of local authorities shall derive from local taxes and spent for providing universal entitlements and development. Pakistan must follow the model of welfare states where resources available to local governments are based on a sufficiently diversified and buoyant nature to enable them to keep pace with the real evolution of the cost of carrying out their tasks.</i><br /><br />http://tns.thenews.com.pk/fiscal-devolution/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-71238809234257114332014-02-18T11:00:37.246-08:002014-02-18T11:00:37.246-08:00#PTI's #Imrankhan paid Rs 195K tax. Is his inc...#PTI's #Imrankhan paid Rs 195K tax. Is his income Rs 1 m a year? Rs 84K a month? Can he afford his big house, lavish lifestyle #PakistanRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-65778074111876672322013-05-05T17:12:55.587-07:002013-05-05T17:12:55.587-07:00Here's a Telegraph story of Pak tx collector f...Here's a <a href="http://www.telegraph.co.uk/news/worldnews/asia/pakistan/10037380/Pakistan-elections-how-the-tax-man-was-forced-out-for-being-too-good-at-his-job.html" rel="nofollow">Telegraph story</a> of Pak tx collector fired by judges for "simply too successful in forcing people to pay more taxes": <br /><br /><i> In a country where almost no-one pays income tax, including more than two thirds of MPs, it only took seven months for Ali Arshad Hakeem to become a hated man.<br /><br />As Pakistan's newly minted chief taxman, he built a database designed to monitor the spending habits of millions of people, and work out how much tax they owed.<br /><br />At the click of a mouse, he could call up details of the elite's holiday habits, electricity bills and bank accounts, complete with photos addresses and vehicle details.<br /><br />This quiet, technocratic revolution came to a juddering halt last month, when Mr Hakeem was suspended by judges over allegations that his appointment breached government rules that demand each job be filled from a shortlist of three.<br /><br />In Pakistan's murky world of political appointments and patronage systems, few believe that was the real reason. Instead, his supporters say he was simply too successful in forcing people to pay more taxes. In other words, he was too good at doing his job.<br /><br /> A recent report by Pakistan's Centre for Investigative Reporting revealed that President Asif Ali Zardari and Rehman Malik, interior minister until mid-March when the government stepped down ahead of next week's elections, were among those politicians who paid nothing.<br /><br />It made gloomy reading for anyone wondering whether there was any will inside Pakistan to reform. "The problem starts at the top," the report stated. "Those who make revenue policies, run the government and collect taxes, have not been able to set good examples for others."<br /><br />Two of Mr Hakeem's key appointments have since transferred, moving them away from jobs where he said they would have helped bring more than £1.3 billion into government coffers.<br /><br />"It's gone. And I'm not going to do it again," Mr Hakeem, 49, told The Sunday Telegraph - his relaxed demeanour and easy smile belying the bitterness he feels.<br /><br />Much of his work has been undone in the short time since he was forced out, he said, and he had no appetite to take on the courts or challenge his suspension. His wife and children had already suffered enough stress.<br /><br />"I hate it. I worked 20 hours a day. I've taken so much hatred for this, everyone is my enemy and out to get me - and then they sack me. Angry is not even the word," he said.<br /><br />The decision to oust him will worry international donors who have kept pressure on Pakistan to shake up its anaemic tax system. They fear that without economic growth and an expanding revenue, the country's growing population could tip what is a fragile state into a failed state.<br /><br />Pakistan is officially classed as a middle income country. It has the resources to build more than 100 nuclear warheads yet depends on handouts to keep its power stations, schools and hospitals running. </i><br /><br />http://www.telegraph.co.uk/news/worldnews/asia/pakistan/10037380/Pakistan-elections-how-the-tax-man-was-forced-out-for-being-too-good-at-his-job.htmlRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-78646040043218886922013-01-25T22:45:33.744-08:002013-01-25T22:45:33.744-08:00Here's a Dawn story on Pak tax collector urgin...Here's a <a href="http://dawn.com/2013/01/26/fbr-chief-says-countrys-tax-system-needs-reforms/" rel="nofollow">Dawn story</a> on Pak tax collector urging wealthy to pay taxes:<br /><br /><i>LAHORE: Chairman Federal Board of Revenue (FBR) Ali Arshad Hakeem on Saturday issued a warning to tax evaders and said the FBR had located over three million citizens who had enormous wealth but had not been paying their taxes, DawnNews reported.<br /><br />Speaking at a ceremony in Custom House, Lahore, Hakeem said out of a population of 180 million, only 800,000 people were paying their taxes.<br /><br />He said tax evaders were being given 75 days’ time to fulfill their responsibilities as citizens after which their names would be added to the exit control list (ECL) and their national identity cards would also be blocked.<br /><br />The FBR chief said Pakistan’s system of taxation was in dire need of reformation, adding that the country could not be run with the existing taxation system in place.<br /><br />Hakeem added that Pakistan had one of the lowest tax-to-GDP ratios in the world.<br /><br />He stressed that the country was in dire need of tax reforms and that the government should take immediate steps in this regard.<br /><br />The FBR chief’s remarks come in the wake of the introduction of a controversial tax amnesty bill in the National Assembly.<br /><br />The opposition says the bill is meant to provide opportunity to millions to whiten their black money whereas Finance Minister Dr Abdul Hafeez Sheikh has said that there were only 800,000 taxpayers in the country and the bill would bring a substantial number of people into the country’s tax net.</i><br /><br />http://dawn.com/2013/01/26/fbr-chief-says-countrys-tax-system-needs-reforms/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-77325141902756256362013-01-15T15:33:15.848-08:002013-01-15T15:33:15.848-08:00^^Suhail: "Pakistani intellectuals need to de...^^Suhail: "Pakistani intellectuals need to develop an existentialist approach rather than pure idealism prevailing generally. This essentially means that the situation as it exists should be clearly understood and accepted and then think of practical solutions to address important issues."<br />----<br /><br />Aha! Suhail is an MQM-supporter.<br /><br />How do I know?<br /><br />See this: http://alturl.com/dxqfjHopewinshttps://www.blogger.com/profile/07885301987622998733noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-62855989275061896902012-12-06T21:49:00.413-08:002012-12-06T21:49:00.413-08:00Here's a News report on US aid disbursement to...Here's a <a href="http://www.thenews.com.pk/Todays-News-3-146902-Pakistan-received-71pc-of-KLB-assistance-off-budget-officials" rel="nofollow">News</a> report on US aid disbursement to non-government entities in Pakistan under Kerry-Lugar Bill: <br /><br /><i>ISLAMABAD: Around 71 percent of the total amount worth $3.172 billion disbursed by the United States under the Kerry-Lugar-Berman (KLB) Act was off-budget assistance for Pakistan in the last three years, official sources in the Finance Division confirmed to The News. Both Pakistan and the US confirmed that a major chunk of money continued to pour outside the government of Pakistan’s channel.<br /> --------<br /><br />“The total amount disbursed to Pakistan from October 2009 to September 30, 2012, since the adoption of the KLB legislation, is around $3.2 billion. If you’d like the exact figure, it’s $3.172 billion,” said spokesperson of the US Embassy in an email message.<br /><br /> <br /><br />When contacted, Federal Secretary Economic Affairs Division Javed Iqbal confirmed that so far the United States has disbursed $3.197 billion for development in the last three years. “There are ongoing projects with an estimated cost of $754 million at the moment,” he added. Official data suggests that the on-budget assistance from the US stood around $350 to $375 million per annum – almost the same pattern followed by Washington in the aftermath of 9/11 when Pakistan decided to side by the country in the war against terrorism.<br /><br /> <br /><br />---<br /> <br /><br />..renowned economist Dr Ashfaque H Khan said that Pakistan received $14.950 billion from US since 2001 till August 1, 2012, of which $9.8 billion was received as Coalition Support Fund (CSF) and the remaining $4.8 billion for economic assistance. On average, cash inflows stood at $437 million per annum in the last 12 years. Against the total losses of $68 billion incurred by Pakistan’s economy, the United States reimbursed just 14 percent or $9.8 billion. However, US spokesperson stated that US assistance to Pakistan has delivered real results for various sectors of the economy.<br /><br /> <br /><br />“US has added over 400 megawatts to the power grid – enough to supply electricity to nearly 900,000 households, or roughly six million people,” she said. In view of the energy sector, key projects funded by the US include power plant renovation at Tarbela dam, modernising generators at Mangla dam, upgrading Guddu, Jamshoro and Muzaffargarh power plants, and building Satpara and Gomal Zam dams.<br /><br /> <br /><br />US funds certain projects that will provide electricity to an estimated two million households in 2013. For the education sector, she added, they were building and renovating 800 schools and providing scholarships to 12,000 students to attend universities in Pakistan. Washington is also helping Pakistan in creating jobs and increasing incomes with programmes that boost agricultural output, build roads, and help entrepreneurs grow their businesses. Furthermore, US has funded the construction and rebuilding of over 650 km of roads in Khyber Pakhtunkhwa (KP) and the Federally Administered Tribal Areas (FATA), while the Peshawar Torkham highway’s reconstruction is underway.<br /><br /> <br /><br />In a statement, US Ambassador Richard Olson said that he was struck by the economic potential Pakistan possessed and the industriousness and vitality of its people. “Washington helped train 14,000 Pakistani farmers to better protect their livestock from diseases,” he said.<br /><br /> <br /><br />“It is also helping Pakistan in building new irrigation canals that will expand the arable land by more than 200,000 acres.”<br /><br /> <br /><br />He further added that US will build more than 1,000 km roads in FATA, KP and Balochistan. “We are also assisting Pakistan in business entrepreneurship,” he maintained. “To promote trade and investment, US is Pakistan’s largest export market. Two way trade between both the countries stood at $6 billion in 2011.”</i><br /><br />http://www.thenews.com.pk/Todays-News-3-146902-Pakistan-received-71pc-of-KLB-assistance-off-budget-officialsRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-4342467571258740022012-12-05T10:39:54.745-08:002012-12-05T10:39:54.745-08:00Here's a News story on FBR trying to tax Googl...Here's a <a href="http://www.thenews.com.pk/Todays-News-3-145443-FBR-devising-ways-to-tax-Google" rel="nofollow">News story</a> on FBR trying to tax Google ad revenue in Pakistan: <br /><br /><i>KARACHI: The Federal Board of Revenue (FBR) is devising ways to tax internet search engine Google Inc on the revenue generated through its business in Pakistan, said sources.<br /><br /> <br /><br />“It is difficult to levy taxes on the Internet search engine as it has no permanent establishment in Pakistan,” said a tax official. “However, since revenue is being generated through local advertisements, local departments have the right to collect tax under this head,” said official.<br /><br /> <br /><br />Google Inc is an American multinational corporation, providing Internet-related products and services, including internet search, cloud computing, software and advertising technologies around the world.<br /><br /> <br /><br />The recent discussion in the FBR on taxing the foreign company came in the limelight following the reports that Indian taxation authorities had issued notices to Google Inc for tax evasion. The Economic Times of India on November 13 reported that Google India had been slapped with a fine of 760 million Indian rupees ($13.8 million by the country’s income tax authorities).<br /><br /> <br /><br />The daily also reported search giant’s Indian arm had misled the department, under-declared its income, violated accounting rules and attempted to underreport revenues.<br /><br /> <br /><br />“The FBR chairman has instructed the tax departments to identify the business activities of the company in Pakistan,” said another FBR official. “So far, the FBR headquarters has not assigned the job to any tax department,” said official.<br /><br /> <br /><br />The authorities are finding agents working on behalf of Google Inc in Pakistan to inquire about the permanent establishment of the company and to assign jurisdiction to a tax department.<br /><br /> <br /><br />The official, however, said that in this case there is a possibility that the United States might express reservations as the two countries have an agreement regarding double taxation.<br /><br /> <br /><br />The authorities admitted that online commercial transactions have become sophisticated and tax departments have failed to generate tax revenue from such activities.<br /><br /> <br /><br />According to media reports, Pakistani advertisers spent Rs32 billion on advertisement in the print and electronic media in 2010-11, in which one percent of amount went to Internet advertising.<br /><br /> <br /><br />It also reported that Google accounts for 35 percent of total online advertisement spending.<br /><br /> <br /><br />Google officials on the condition of anonymity said that Pakistani authorities have no jurisdiction to tax the international entity.<br /><br /> <br /><br />About withholding tax by local advertisers, they said, big vendors pay the tax through proper invoices, while small vendors made transactions through credit cards and other means.</i><br /><br />http://www.thenews.com.pk/Todays-News-3-145443-FBR-devising-ways-to-tax-Google<br /><br />Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-69884972448946884462012-08-17T08:50:55.858-07:002012-08-17T08:50:55.858-07:00Here's HuffingtonPost on zakat collection in P...Here's <a href="http://www.huffingtonpost.com/2012/08/17/ramadan-pakistanis-dodge-tax-collectors_n_1795840.html" rel="nofollow">HuffingtonPost</a> on zakat collection in Pakistan:<br /><br /><i>KARACHI, Pakistan — During the Muslim holy month of Ramadan, Muhammad Tashfeen Khan does what millions of other Pakistanis do: tries to keep his money from the government's religious tax collectors.<br /><br />The wealthy businessman pulls all his savings from his bank account right before Ramadan starts so the government cannot deduct 2.5 percent as zakat, the annual donation many Muslims are religiously required to make as a basic tenet of the Islamic faith.<br /><br />Khan and many other Pakistanis do this, not to avoid paying zakat, but to make sure the money doesn't go to the government, which is viewed by most people as incompetent and corrupt.<br /><br />For many years, Pakistan required all Sunni Muslims, who make up a majority of the country's population, to pay zakat straight to the government. That regulation changed recently, but many Pakistanis seem unaware and continue to pull their money out of the banks to elude the state.<br /><br />Instead, they pay zakat to needy individuals and hundreds of private charities operating in the country – some of which are actually fronts for Islamist militant organizations seeking money for both social welfare activities and militant activity.<br /><br />"When it comes to zakat, or any other religious issue, I can't trust the government," said Khan, who runs a chain of private schools in the southern port city of Karachi. It's a "corrupt system, which hardly cares about the poor," he said.<br /><br />A former religious affairs minister was imprisoned last year for allegedly cheating hundreds of thousands of Pakistani Muslims out of money while they were making the annual Hajj pilgrimage to Saudi Arabia.<br /><br />Khan said he gives over $1,000 to individuals and private charities every Ramadan, an amount he indicated was greater than what he would pay if the government deducted zakat from his bank account. Ramadan began in July and is expected to end in the next few days, depending on the sighting of the new moon.<br /><br />"By taking matters in my own hands, I am satisfied that it goes to the deserving people and charity organizations," said Khan.<br />----------"</i><br /><br />http://www.huffingtonpost.com/2012/08/17/ramadan-pakistanis-dodge-tax-collectors_n_1795840.htmlRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-64154888226574954552012-07-18T10:04:43.396-07:002012-07-18T10:04:43.396-07:00Here's a report on US civilian economic aid di...Here's a <a href="http://www.firstpost.com/world/pakistan-receives-2-8-billion-as-civilian-aid-from-us-381905.html" rel="nofollow">report</a> on US civilian economic aid disbursed to Pakistan since 2009:<br /><br /><i> The United States has disbursed $ 2.8 billion in civilian assistance to Pakistan since the passage of the Kerry-Lugar Berman Bill in 2009, according to the State Department.<br /><br />“While figures for this fiscal are not yet available, since the passage of the Kerry-Lugar-Berman legislation in October 2009, the US government has disbursed $ 2.8 billion in civilian assistance, including approximately USD 1 billion in emergency humanitarian assistance,” the State Department said in a statement.<br /><br />The non-humanitarian civilian assistance funds are spent in five priority sectors: energy, economic growth, stabilization of vulnerable areas, education, and health.<br /><br />In 2011, the US supported construction of 210 kilometers of road in FATA and Khyber-Pakhtunkhwa, funded the world’s largest Fulbright exchange program, and sponsored initiatives promoting private sector growth and civil society development in Pakistan.<br /><br />“The US remains committed to a strong, mutually respectful relationship with Pakistan. We consider bilateral US civilian assistance to be an important component of that relationship and believe it can help Pakistan become a more<br />prosperous, stable, and democratic state, which serves the national interests of both the United States and Pakistan,” the statement said yesterday.<br /><br />“Civilian assistance to Pakistan has been ongoing throughout the closure of the Nato supply lines and has continued after their opening,” the statement said.</i><br /><br />http://www.firstpost.com/world/pakistan-receives-2-8-billion-as-civilian-aid-from-us-381905.htmlRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-64811647861519745852012-07-15T09:33:21.704-07:002012-07-15T09:33:21.704-07:00Here's a Dawn Op Ed by Sakib Sherani:
As a re...Here's a <a href="http://dawn.com/2012/07/13/pakistan-the-us/" rel="nofollow">Dawn Op Ed</a> by Sakib Sherani:<br /><br /><i>As a result of the agreement on reopening Nato’s ground routes, it has been reported that Pakistan will receive around $1.2bn of unpaid arrears pertaining to the Coalition Support Funds (CSF). This money is reimbursement for costs already incurred by Pakistan in military operations in the northwest in support of Nato/Isaf’s Afghanistan campaign, and not assistance.<br /><br />Nonetheless, it represents a not insignificant potential reduction of the fiscal deficit (by 0.5 per cent of GDP) and the need to borrow by government. More importantly, it has the potential to calm the financial markets that are nervous about depleting forex reserves in the context of large debt repayments due this fiscal year.<br /><br />However, beyond this the CSF inflow will have a limited effect. To put this money into context, $1.2bn is roughly the equivalent of 0.5 per cent of GDP, 2.5 per cent of Pakistan’s annual foreign exchange earnings and 2.7 per cent of projected imports this year. More importantly, for the benefit of friends who celebrate the arrival of each $1bn of foreign taxpayer money as if it was ‘manna from heaven’, this inflow (or the elusive Kerry-Lugar money for that matter) is the equivalent of a miniscule 2.9 per cent of potential tax revenue that Pakistan can collect — but chooses not to.<br /><br />In terms of overall US assistance, Pakistan has been a recipient of substantial inflows from the US in fits and starts over the years, with the bulk being in the realm of military aid. In terms of US economic assistance to Pakistan, the defining features since inception appear to have been:<br /><br />— It has not been enduring, but spasmodic;<br /><br />— The US has invariably followed a short-sighted, ‘transactional’ approach in its relationship with Pakistan, and continues to do so despite a strong case having been made at the start of the Pakistan-US strategic dialogue for a ‘transformational’ relationship;<br /><br />— Assistance has peaked in non-democratic set-ups;<br /><br />— US aid has generally been pro-cyclical, reinforcing upturns in the economy, rather than supporting Pakistan’s economy in a downturn (as currently). As a result, the impact has not been ‘visible’.<br /><br />— US programmes are mired in bureaucracy, with large ‘lags’ and high transactional costs (to be fair, the latter is pretty much the case with all aid programmes across the board);<br /><br />— Spending has, until now, either ignored areas deemed high-impact by the Pakistan side (agriculture, water, market access, for example) or, has been spread too thin over a large number of projects. As a result, the impact has been diffused, denying the US visibility for the taxpayer dollars it has spent in Pakistan.<br /><br />The most potent form of economic assistance the US can provide to Pakistan, one with the greatest externality, is allowing preferential market access to the country’s textile and clothing (T&C) exports. If focused on the right products, such as garments (labour-intensive and value-added), the US intervention has the potential to create hundreds of thousands of additional direct and indirect jobs, carving a powerful urban, educated (and possibly currently unemployed) constituency comprising the country’s youth.<br /><br />This will also be the ‘lowest cost’ in terms of US taxpayer dollars, since the additional exports from Pakistan will most likely displace existing imports into the US from some other producer.<br /><br />Strangely, this is proving to be the second hardest legislation to bring to Congress after domestic gun control. Pursued actively by Pakistan since 2004, this request has routinely met the same response: Congress will not sacrifice the interest of its states with a large textiles constituency. Since then, however, Congress has allowed duty-free access for textiles and clothing to large regional blocs in Central America, the Andean states, and a number of African countries....</i><br /><br />http://dawn.com/2012/07/13/pakistan-the-us/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-28067390658865191382012-06-01T16:42:50.412-07:002012-06-01T16:42:50.412-07:00Here's a Bloomberg report on Pakistan's 20...Here's a <a href="http://www.businessweek.com/news/2012-06-01/pakistan-cuts-taxes-raises-wages-risking-deficit-as-vote-looms" rel="nofollow">Bloomberg report</a> on Pakistan's 2012-13 federal budget:<br /><br /><i>Pakistan cut taxes and raised government salaries in an election-year budget that risks missing a target to narrow the deficit from a three-year high.<br /><br />The government pledged to narrow the budget gap to 4.7 percent of gross domestic product in the year ending June 30, 2013 from 7.4 percent of GDP in the previous 12 months, Finance Minister Abdul Hafeez Shaikh said in his budget speech in Islamabad today. Opposition lawmakers shouted anti-government slogans, held up placards and scuffled during the presentation.<br /><br />Prime Minister Yousuf Raza Gilani’s government, facing a general election by February at the latest, is under pressure to counter growing public anger over power blackouts, the fastest inflation in Asia and an insurgency on the Afghan border. The government is relying on domestic borrowings after aid flows from the U.S. and the International Monetary Fund dwindled.<br /><br />“Raising salaries, reducing duties and increasing expenditure means they are likely to miss the fiscal deficit target once again,” said Saad Khan, fund manager and economist at Askari Investment Management Ltd., in Karachi which oversees 25 billion rupees ($267 million) in stocks and bonds.<br /><br />The budget was unveiled after the nation’s financial markets closed. The Karachi Stock Exchange 100 Index (KSE100) rose 0.7 percent today and has climbed 14.5 percent in the past year. The Pakistan rupee was at 93.67 against the dollar, having declined 7.7 percent over the past 12 months. </i><br /><br />http://www.businessweek.com/news/2012-06-01/pakistan-cuts-taxes-raises-wages-risking-deficit-as-vote-loomsRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-39933538812088565342012-05-31T20:15:57.640-07:002012-05-31T20:15:57.640-07:00Here's an AFP report on Pakistan economy:
Pak...Here's an <a href="http://www.google.com/hostednews/afp/article/ALeqM5i5FI6KtGv3YCAp5BkWTywYT69MaQ?docId=CNG.f69b45f6cd1189152e35c5b5ab00af47.8a1" rel="nofollow">AFP report</a> on Pakistan economy:<br /><br /><i>Pakistan's economy grew by 3.7 percent in the current fiscal year with tax collection up an "unprecedented" 25 percent, Finance Minister Abdul Hafeez Shaikh said Thursday.<br /><br />He unveiled the statistics one day before presenting the next budget to parliament amid concerns that Pakistan is headed towards a financial crisis unless it returns to the IMF.<br /><br />"The growth rate remained 3.7 percent and it is the highest in the past three years," Shaikh told a news conference of the current fiscal year that ends June 30.<br /><br />"The growth rate for a country like Pakistan should be at least five to six percent and this is our medium term goal," he said.<br /><br />Shaikh said that high oil prices in the international market had affected economies all over the world, including Pakistan's, and that Taliban and Al-Qaeda-linked violence deterred foreign investors.<br /><br />Pakistan has also suffered from a second consecutive year of major flooding, totting up losses of $3 billion, Shaikh said.<br /><br />The minister said the budget deficit was five percent for the period July 2011 to April 2012. External forecasts predict it will nudge closer to seven percent of GDP for the fiscal year amid warnings that the government is running out of ways to fund it.<br /><br />The IMF bailed out Pakistan with an $11.3 billion loan package in 2008 that stopped last November after Islamabad rejected strict reform demands, largely over tax.<br /><br />Shaikh said tax collection had increased by 25 percent compared to the previous year.<br /><br />"For the first 10 months we had tax collection of 1,450 billion rupees as compared to 1,050 billion rupees last year and it is an increase of 25 percent which is unprecedented in Pakistan's history," Shaikh said.<br /><br />The country's tax revenues are among the lowest in the world at just 9.8 percent of GDP in fiscal 2010-2011, says the Asian Development Bank. Less than two percent of the population pays tax on their income.<br /><br />The minister said the government had reduced its expenses by 10 percent.<br /><br />Inflation stood at 10.8 percent, compared to 13.8 percent during the previous fiscal year, he said, adding: "We have adopted a tight monetary policy."<br /><br />Pakistan has also missed out on payments from the United States for its efforts to fight militancy under the Coalition Support Fund (CSF).<br /><br />This brought around $8.8 billion into Pakistan's coffers between 2002 and 2011, including $1.5 billion in 2009-10, but Islamabad stopped claiming the money as ties with Washington collapsed in the wake of the raid that killed Osama bin Laden last year.</i><br /><br />http://www.google.com/hostednews/afp/article/ALeqM5i5FI6KtGv3YCAp5BkWTywYT69MaQ?docId=CNG.f69b45f6cd1189152e35c5b5ab00af47.8a1Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-81148567871808761252012-05-20T22:20:45.826-07:002012-05-20T22:20:45.826-07:00Here's an excerpt from Dawn report on Punjab&#...Here's an excerpt from <a href="http://dawn.com/2012/05/21/punjabs-lost-growth-momentum/" rel="nofollow">Dawn report</a> on Punjab's economy:<br /><br /><i>The slowing regional growth has led to contraction in Punjab’s share in the national economy to 54.9 per cent in 2011 from 55.5 per cent in 2000 and 55.7 per cent in 2007.<br /><br />Punjab’s economy, according to the IPP, is composed of 24 per cent agriculture (17 per cent for the rest of Pakistan and 20.9 per cent for Pakistan), 21.2 per cent industry (31 per cent for the rest of Pakistan and 25.8 per cent for Pakistan) and 54.8 per cent services (52 per cent for the rest of Pakistan and 53.3 per cent for Pakistan). The provincial economy’s sectoral composition signifies relative importance of agriculture in its economy and underdevelopment of industry as compared to the rest of Pakistan, says the IPP.<br /><br />The report identifies three major factors that have dragged down economic growth in Punjab in recent years: decreasing water availability for agriculture, growing energy crunch for industry and declining public sector investment in economic infrastructure.<br /><br />The IPP points out that performance of agriculture plays a major part in the economic growth of the province. During the last few years, it contends, the performance of agriculture sector has been disappointing, especially of major crops that have shown little growth since 2007 due to growing water shortages and rising fertiliser prices. Wheat production was virtually stagnant and output of sugarcane and cotton dropped by 10 per cent and 17 per cent respectively. The only crop with significant growth of 26 per cent was rice. In addition, there was hardly any growth in minor crops. Given the relatively large share of agriculture in the regional (Punjab) economy, the growth rate is likely to be lower because even in good years agriculture is unlikely to average a growth rate above four to five per cent,” it underlines.<br /><br />The annual average agriculture growth rate in Punjab declined to just one per cent between 2007 and 2011 from 3.3 per cent between 2000 and 2007. In contrast, the average agriculture growth rate rose to three per cent for the rest of Pakistan from 2.5 per cent.<br /><br />Growing energy shortages have affected industrial output in Punjab disproportionately, according to the report. There has been cumulative drop in gas consumption in the province of 13 per cent in the last few years compared to an increase of 16 per cent in the rest of Pakistan, especially in Sindh.<br /><br />Similarly, increase in electricity consumption since 2007 has been restricted to only two per cent compared to six per cent in the rest of Pakistan. Punjab’s share in the national production of cotton yarn, for example, dropped from 33 per cent in 2007 to 29 per cent in 2011 and in cotton cloth from 43 per cent to 37 per cent.<br /><br />Additionally, the report underlines the weaker presence in Punjab of industry producing consumer durable and construction inputs compared to Sindh as another factor for slower growth. “In the peak of business cycle, industries producing consumer durables like automobiles and industries providing construction inputs like cement show very high growth rates. During 2003 and 2007, for example, production of automobiles showed extraordinarily high growth rate of 31 per cent. The growth rate of cement industry was also high at 18 per cent.</i><br /><br />http://dawn.com/2012/05/21/punjabs-lost-growth-momentum/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-60350661151141124582012-04-16T11:07:02.225-07:002012-04-16T11:07:02.225-07:00Here's an ET Op Ed on taxation in Pakistan:
D...Here's an <a href="http://tribune.com.pk/story/365203/taxing-the-comatose-economy/" rel="nofollow">ET Op Ed</a> on taxation in Pakistan:<br /><br /><i>Due to increasing trust deficit between the Federal Board of Revenue (FBR) and taxpayers, incidence of avoidance and evasion is on the rise. As collections remain weak, the government struggles to generate money to run the country. The irony is that the taxpayers do not want to pay taxes because of the trust deficit. Thus, the government argues well – no money no honey. It is a kind of egg-chicken like situation.<br /><br />Sadly speaking, the current tax-to-GDP ratio has been languishing below 10% since long. India has improved and its ratio has reached 16.4%, China 14.9%, Sri Lanka 14.8% and Bangladesh having the lowest of all at 8.1%.<br /><br />Taxes should be equitable in the sense that the heaviest burden should fall more on the rich and incidence of evasion and avoidance is at the minimum. This is only possible when the economy has a more built-in capacity which means contribution of direct taxes (progressive or proportional) should be greater than indirect taxes (regressive).<br /><br />In contrast, the current contribution of direct tax is around 39%. Indirect taxes contribute over 60% to the revenue collection. The major stumbling blocks in the way of improving direct tax collection are the increasing size of black or cash economy, leakages in tax collection, narrow tax base and politically motivated tax exemptions.<br /><br />Topping the list is governance problem which has become putrid. The dogmatic position of some political parties and that of business community over the reformed general sales tax (RGST) has augmented the situation further. Its fate hitherto remains obscure.<br /><br />Indeed, indirect taxes not only punish the poor the most but also stoke inflation. According to a joint study of the World Bank, IFC and PricewaterhouseCoopers, Pakistan’s ranking has slipped from 145 in 2011 to 158 in 2012 in terms of ease of paying taxes, 149 to 155 in terms of tax payments, 168 to 170 in terms of time required to comply with three major taxes.<br /><br />Pakistan scores better on total tax rate (TTR) which measures the amount of taxes and mandatory contributions borne by the business in the second year of operation, expressed as a share of commercial profit. Only China scores high on the tax payment indicator.<br /><br />With a narrow base and high enforcement cost, the need for additional revenues is substantial in Pakistan, but improving revenue mobilisation has importance beyond that. The role of the FBR thus is the centre of attention. Instead of undertaking piecemeal tax policy approach, the FBR should try to overhaul and modernise the existing tax administration which is free from all political influence.<br /><br />Plugging leakages in the bucket can help but the FBR would need better quality buckets too.</i><br /><br />http://tribune.com.pk/story/365203/taxing-the-comatose-economy/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-74669820007198910552012-04-05T20:40:02.341-07:002012-04-05T20:40:02.341-07:00Here's a Businessweek story on Pakistan's ...Here's a <a href="http://www.businessweek.com/articles/2012-04-05/the-secret-strength-of-pakistans-economy#p2" rel="nofollow">Businessweek story</a> on Pakistan's informal economy:<br /><br /><i>It’s early morning in Karachi, Pakistan’s biggest city, and Muhammad Nasir is outside his makeshift shelter of palm leaves, rags, and bamboo, washing up after breakfast. He uses water stolen from a nearby supply pipe that belongs to the local water utility. The 17-year-old bids farewell to his mother, an unlicensed midwife, and walks to his tire-repair shop, an open-air stand in a residential area with a table of tools and a wooden bench. He checks to make sure the electricity he’s drawing illegally from the overhead power line is on so he can run his tire pump. Then he sends 10-year-old Abid, one of his two employees, along with 12-year-old Irfan, to get tea from a nearby shop.<br /><br />Nasir’s business, his home, his power and water supply, and even the cup of tea Abid brings him don’t exist in Pakistan’s official figures. They’re part of another economy that doesn’t pay taxes or heed regulations. It probably employs more than three quarters of the nation’s 54 million workers and is worth as much as 50 percent of Pakistan’s 18 trillion rupee ($200 billion) official gross domestic product. And while the documented economy had its smallest expansion in a decade at 2.4 percent in the year ended June 2011, soaring demand for cars, cement for houses, and other goods shows the underground market is thriving.<br />----------<br />the nation’s purchasing power is more than estimated, says Nadeem Naqvi, managing director of the Karachi Stock Exchange. Rising crop prices have pumped an extra 1 trillion rupees into the rural economy in the past four years, most of it undocumented, Naqvi says. He estimates agriculture may account for as much as 35 percent of GDP, instead of the 21 percent reported.<br /><br />Evidence of consumer demand is everywhere as new shopping malls and restaurants in Karachi are filled to capacity. Car sales rose 14 percent in February from a year earlier, as more people could afford a Toyota Corolla or Suzuki Mehran (a small hatchback), according to the Pakistan Automotive Manufacturers Association. More than half a million motorbikes hit the road in the eight months ended February, a 5 percent increase, perhaps a sign that Nasir’s tire business has a bright future. ..<br />---------<br />The bottom line: If participants in Pakistan’s undocumented economy paid their taxes, the government would collect an extra 800 billion rupees.</i><br /><br />http://www.businessweek.com/articles/2012-04-05/the-secret-strength-of-pakistans-economy#p2Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-80440162144026177412012-03-27T20:39:05.951-07:002012-03-27T20:39:05.951-07:00Here's a Business Recorder report on foreign a...Here's a <a href="http://www.brecorder.com/money-a-banking/198/1169611/" rel="nofollow">Business Recorder</a> report on foreign assistance received July 2011 to March 2012:<br /><br /><i>The United States remains the major grant assistance provider to Pakistan during the first nine months of the current fiscal year while the Asian Development Bank (ADB) and the World Bank have been major lenders to Pakistan by releasing $470 and $269 million respectively during the period.<br /><br />The total foreign assistance received by Pakistan from July 2011 to March 2012 was $1.6 billion with US as the major grant provider despite the recent tension between the two countries.<br /><br />The foreign assistance provided by the ADB and the World Bank is 'loan-based' assistance while the assistance provided by the US is 'non-loan' assistance that in other terms is called 'grant'.<br /><br />According to the data available with Business Recorder, the US has provided the grant assistance of $112 million to Pakistan during the first nine months of 2011-12.<br /><br />Agriculture and Livestock ($3.4m) Food Assistance ($102.7m) Health and Nutrition ($1.1m) Crisis Prevention and Disaster Reduction (1.5mdollar) and Housing and Construction ($1.8m) are the sectors for which this amount has been released by the US.<br /><br />The data reveals that $470 million has been released by the ADB for various projects including the projects on Crisis Prevention and Disaster Reduction (2.9m$), Rural Development( 6.9m$), Banking, Finance and Insurance ($200m), Education ($6.5m), Energy Generation( $73m), Health and Nutrition ($4.3m), Transport ($111.4m), Governance ($0.6m), Budgetary Support( $19.7m), Agriculture and Livestock( $11.4), Urban Development ( $5m),and Environment and Natural Resources ($28.4m).<br /><br />The World Bank remains the second major lender to Pakistan by disbursing $269 million.<br /><br />The projects under which this amount has been released includes Banking, Finance and Insurance ($2.5m), Urban Development (34.9m), Education ($34m), Agriculture and Livestock( $15.5m), Health and Nutrition ($41.7), Trade ($1.2m), Transport ($3.3m), Energy Generation ( $23m) , Social Welfare ( $21.1m)Water and Sanitation ($0.06m), Governance ( $1.4m)and Food Assistance ($5.6million).<br /><br />The data says that the Islamic Development Bank (IDB) has provided $35.1 million.<br /><br />Germany 23.2 million dollars, UK 22.2 million dollar, and UN has released $26.1 million.<br /><br />The data reveals that Canada has disbursed $18 million to Pakistan from July 2011 to March 2012, Switzerland 1.2 million dollars, Japan 5.2 million dollars and EU has released $13.1 million.<br /><br />Spain has released $3.15 million, Norway $3.3 million, Saudi Arabia 1 million dollar, Italy $1.6 million, Netherlands $17.3 million, Sweden $7.7 million, Australia $22 million, China $0.5 million, International Private Donors $0.6 million and Ireland has disbursed $3 million.<br /><br />France has disbursed, according to the document, $0.5 million, Belgium $6.8 million, Denmark $1.4 million, Luxembourg $0.8 million, and New Zealand has released $0.4 million to Pakistan from July 2011 to March 2012.</i><br /><br />http://www.brecorder.com/money-a-banking/198/1169611/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-58355417465482635522012-02-27T17:34:12.474-08:002012-02-27T17:34:12.474-08:00The World Bank will extend an assistance of upto $...The World Bank will extend an assistance of upto $5.5 billion over FY 12-14 to support Pakistan’s poverty reduction and development agenda, reports <a href="http://www.pakistantoday.com.pk/2012/02/wb-to-provide-5-5b-to-pakistan-in-3-years/" rel="nofollow">Pakistan Today</a>.<br /><br />According to Bank’s Country Partnership Strategy Progress Report, a mid term review and implementation assessment, the Bank has responded flexibly in the face of the tremendous challenges Pakistan has gone through over the past year or so.<br />World Bank Country Director for Pakistan Rachid Benmessaoud said they will continue strong support to Pakistan while keeping a keen eye on implementation to ensure that these efforts translate into real results on the ground.<br />The progress report says the overall focus of the Bank’s strategy- to help Pakistan’s economy get back onto the path of high, sustained growth –remains valid and consistent with the overall priorities of the government of Pakistan as articulated in its New Framework for Growth Strategy. Also, the Bank support will remain centred on the original pillars of the CPS- the economic governance, human development and social protection; infrastructure and security and conflict risk reduction.<br />The Bank engagement over FY 12-14 is projected at up to $ 4 billion in new International Development Association (IDA) credits and International Bank for Reconstruction and Development loans. This will be supplemented by a robust programme under the Multi donors trust fund (MDTF) with initial commitment of $ 140 million and IFC support projected at $ 1.5 billion. <br /><br />http://www.pakistantoday.com.pk/2012/02/wb-to-provide-5-5b-to-pakistan-in-3-years/Riaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.comtag:blogger.com,1999:blog-5848640164815342479.post-18779305747931208082012-01-24T19:12:59.073-08:002012-01-24T19:12:59.073-08:00Here's a Global Post story on NATO using smugg...Here's a <a href="http://www.globalpost.com/dispatch/news/regions/asia-pacific/pakistan/120123/pakistan-border-nato-us-troops-afghanistan" rel="nofollow">Global Post</a> story on NATO using smugglers to supply its troops in Afghanistan through Pakistan: <br /><br /><i>With few other options available to it since Pakistan closed its border crossings almost two months ago, NATO has at times resorted to paying local smugglers to get much-needed supplies to its troops fighting in Afghanistan, Pakistani officials say.<br /><br />The Pakistani and Afghan smugglers, who must pay bribes to militants to travel safely through some areas, navigate treacherous routes over the 1,800-mile mountainous divide that separates the two countries to bring containers of oil, food and other essential items — all at a price — to soldiers on the other side.<br /><br />“Borders mean nothing to us. We have been crossing in and out for centuries,” Sahib Khan, a smuggler who said NATO had hired him, told GlobalPost.<br /><br />The hiring of illegal smugglers came after a failed attempt by NATO to pay private companies, which truck goods across the border under the Pakistan-Afghanistan Free Trade Agreement (PATA). These private companies, Pakistani officials said, were secretly swapping out their normal cargo for NATO supplies until Pakistani security forces caught wind of the scam.<br /><br />A senior officer for the Frontier Corps, an elite military unit that is responsible for security along the border, told GlobalPost that a total ban on the movement of containers under PATA, which was signed in 2010 to promote bilateral trade, eventually foiled the strategy.<br /><br />“We had concrete evidence that some of the containers being imported by private companies, under PATA, were being used to smuggle supplies for NATO troops under cover of commercial imports,” the official said.<br />----------<br />Smuggling between Pakistan and Afghanistan has long been a profitable and vibrant business. Various trade agreements have been signed between the two neighbors in a bid to contain the practice, but high import and export taxes coupled with little government oversight, thwarted those attempts.<br /><br />Mostly items like flour, edible oil, lentils, dried vegetables, contraband cigarettes, and animals for meat are smuggled into Afghanistan, while spare auto parts, electronics and unregistered vehicles are smuggled the other direction.<br /><br />Smuggling is so widespread that it has become the backbone of the economy in towns and villages along the border, where locally it is treated simply as normal trade. The mountainous terrain provides an edge over security to smugglers who regularly trickle across the border without any trouble.<br /><br />Sahib said that most of the food and oil supplies he has carried across the border for NATO originate from the southern port city of Karachi, and are moved through Peshawar and Quetta, and finally through Pakistan’s tribal areas, which are largely under the authority of various militant groups.<br /><br />For those militants, the smugglers have been an important source of income. Smugglers are required to pay “rahdari,” or “passage,” an unofficial tax that allows them safe passage.<br /><br />“Once we are onto the route, it’s the responsibility of those who receive rahdari to ensure we are able to safely enter into Afghanistan,” Sahib said.<br /><br />Any smuggling that is done on behalf of NATO can in no way make up for the closed borders, however. Smugglers say they carry between 20 and 25 small containers a day while, when the border crossings were open, NATO shipped an average of 250 large containers a day — making the reopening of the borders essential to the war effort.</i><br /><br />http://www.globalpost.com/dispatch/news/regions/asia-pacific/pakistan/120123/pakistan-border-nato-us-troops-afghanistanRiaz Haqhttps://www.blogger.com/profile/00522781692886598586noreply@blogger.com