50 percent increase in Govt Employess salary

[sparklingway]

India has introduced VAT in 2005. VAT or no VAT, tax evasion is still possible and the trading community in India have found ways to avoid taxation. I doubt that introducing VAT will solve Pakistan's taxation problems. It is just one of the tools to block loopholes and limit the opportunity given to tax evaders.

VAT generated income to the GoP is a plus but I am not sure if the numbers add up and GoP will be able to reduce its bulging fiscal deficit.

Our low tax revenue to GDP ratio is primarily because small business owners defy income tax, and nearly everybody defies property tax and capital value tax.

It's a social problem, especially entrenched in the middle class. Never participate in the political process but complain ! Never vote but ask for accountability ! Never pay taxes yet ask for social service !

Indirect taxation is the norm for the state then. Out tax woes have been discussed in many forums already. Also, India isn't far ahead. Your tax revenue to GDP ratio are still extremely poor. (this is not a India vs Pakistan debate but just mentioning this as most developing nations are facing similar problems but South Asia faces this problem extremely, maybe because of a culture of living for free on the tax money of others)

 

[ramu]

Our low tax revenue to GDP ratio is primarily because small business owners defy income tax, and nearly everybody defies property tax and capital value tax.

It's a social problem, especially entrenched in the middle class. Never participate in the political process but complain ! Never vote but ask for accountability ! Never pay taxes yet ask for social service !

Indirect taxation is the norm for the state then. Out tax woes have been discussed in many forums already. Also, India isn't far ahead. Your tax revenue to GDP ratio are still extremely poor.

India 17.7% (tax to GDP) GDP : $1.243 trillion (2009)
Pakistan 10.6% (tax to GDP) GDP: $0.166 trillion (2009)

Indian tax to GDP is 170% that of Pakistan. If that in your book is not far ahead, well I am fine with that.

 

[sparklingway]

India 17.7% (tax to GDP) GDP : $1.243 trillion (2009)
Pakistan 10.6% (tax to GDP) GDP: $0.166 trillion (2009)

Indian tax to GDP is 170% that of Pakistan. If that in your book is not far ahead, well I am fine with that.

The figure of 17.7 percent you got from Wikipedia, and that figure does not come from any of the sources mentioned in the references of the article. When reading Wiki, check references and sources. The references mentioned at the bottom do not have either Pakistan or India listed in their tables.

The figure is around 11-13 percent. I do not have the time right now to figure out the number by digging through your official websites, but I'm sure you would be able to do so and bring an official number for me.

You might want to read these as these kind of support the number I'm giving:-

Tax-GDP ratio slated to drop to 10.94% in 2009-10 - Economy and Politics - livemint.com
India's tax to GDP ratio jumps to 11.8 percent - SiliconIndia
Increase in the tax-GDP ratio Increase in the tax-GDP ratio

No where near the 17.7 percent mark (cannot jump from 11.8 to 17.7 in one year). That number is fictitious. It might be aggregate tax revenue i.e. state and central combined but that is not what Pakistan is reporting, we like almost all other countries are reporting federal tax revenue collection as a percentage of GDP.

Anyways, I was comparing with developed countries and not going on a India vs Pakistan : Which is better fight.