Are Pakistanis' "self entitlement" problem ruining Pakistan's budget? Sell petrol for 2 rupee/litre

[unbiasedopinion]

Only way a government can earn is to increase the tax base. Without doing this, government no matter how hard they try cannot increase its revenue.

Pakistan must find its way to increase the tax base by properly doing the audits and make people earning high, pay tax.

 

[Archie]

I agree with the op

In India the price of petrol has declined by 20% over the past 6 months, as compared to nearly 60% drop in oil prices world wide.
Indian Oil Marketing Companies had accumulated losses of Rs 50000 Crores. Indian Govt has asked them to recoup their losses before oil prices are dropped any further.
India will also save 50 Billion USD a year thanks to drop in oil prices.
Indian Government will also be able to meet its fiscal deficit target

 

[Faiez]

I don't know the conditions of those countries, neither that of Pakistan :p

But again, the state can always get that money by some other way if needed. Say like, state used to get 10% out of every liter of oil.

And it then reduced this tax to 5%. That caused a general drop in inflation and thus more products are led to be bought, lets say the economy got faster by 2%.

If lets say an ordinary person buys 100 products every month, increasing the tax of the product by, lets say, 0.5% would make the state earn more than it would by just collecting more taxes via oil.

So yeah, in this case the state must know what it is doing. Things like reducing the oil tax is not a very simple decision to take.

But why the state wants so much money ? Why is it so greedy ? why can't they focus on accountability, make sure what ever they are already spending is spent the best way possible ? why do they have to use class warfare tactics ?

And why the hell do they control prices ? why don't they let everyone negotiate freely ?

Best practice would be to eliminate all the taxes and all projects.

or reduce taxes to a more sensible level and keep some infrastructure projects going.

pakistan has tax rate of 25% and 33% for small and big corporations respectively, which is freakishingly high...Income taxes are also high and so are sales/customs taxes. If they start collecting taxes, businesses will completely shut down and it will have a massive impact on the economy. They need to reduce taxes before they ever try to collect them.

 

[WishLivePak]

@Jungibaaz this thread is filled with even more "self entitlement" (which the title due fully mentions). "Gov't always abusing poor, gov't should reduce taxes and still continue with infrastructures, gov't is greedy and together with rich abuse the poor, why gov't increase tax on oil, it's stealing more money from poor." And soon, metro bus should be made free, everyone should get free PIA tickets, roti should be 5 rupees because that's what I paid during Musharraf rule, clearly Nawaz and Zardari (charging 10% tax) stealing from poor awam, don't sell PIA and don't increase airfare and so forth.

This self entitlement

Last time I went to Pakistan, I had mostly a hand carry and rest 2 bags were filled for the self entitled, had a jacket on during warm time (was a gift), carry a heavy laptop. Going home feels like being a muhajir. Even this time we're asking for laptop tablets and cameras. Mostly decided to just buy it in Pakistan so we can travel peacefully. Besides, things are cheaper in Pakistan.. But nope, "it's coming from Canada, it's got to be better because it's expensive right"

The other time I went to Pakistan, this guy was making me buy gifts using my money for others, even though he was richer than me. But hey, I own Canada, I'm King Charles, got a laptop and gifts factory in backyard and my printer prints dollars 24/7

I agree with the op

In India the price of petrol has declined by 20% over the past 6 months, as compared to nearly 60% drop in oil prices world wide.
Indian Oil Marketing Companies had accumulated losses of Rs 50000 Crores. Indian Govt has asked them to recoup their losses before oil prices are dropped any further.
India will also save 50 Billion USD a year thanks to drop in oil prices.
Indian Government will also be able to meet its fiscal deficit target

Meanwhile our PSO has over 2 billion dollars of debt, so much so it cannot buy more oil. Pakistan economy is in the gutter unlike India. 4 billion dollar could've paid off PIA debt, PSO debt (which will essentially remove circular debt and basically gov't pays off debt of everyone who owes PSO, so from one arrow, multiple kills) and still have left over for public infrastructures like hospitals or schools, who will produce further jobs and taxes.

But you know what, our finance ministry is run by an accountant. So what does he know on how to run a nation's finances.

 

[Kambojaric]

It works the other way around. If you want to revive an economy, it is one of the best ways to reduce the price of oil. You can always collect that 'lost' money by some other way anyway.

Fiscal policy is nothing but controlling the circulation of the money in the economy (both the state and private sectors).

State sucks money from economy by collecting taxes or capitalization, and then gives it back to the economy by buying products or give tax breaks for some sectors for more investment etc.

Faster the money travels around, better the economy gets. The total amount of money that travels between the state and the private sectors is also important. If it is too low, then the economy would not feel the supposedly positive impacts of state controlled fiscal policies.

In Pakistans case by the looks of it the state wants to give tax breaks to the textile industry whose products are one of our largest exports. If I understand things correctly, the more we export, the stronger the rupee becomes and the cheaper commodities like oil and gas will become in the future for imports.

 

[Shah01]

Very good post. In the UK people pay like twice as much as in Pakistan for petrol. Now I can understand that the living standard is higher and availability of public transport etc.

People need to understand that the government only gets money from taxes. It does not have money trees which could grow it (maybe in the case of printing more money). So the government collects taxes to run things like the hospitals, pensions, police, army, education, building infrastructure.... etc (the list goes on). To pay for all of this it collects taxes and if that is not enough it borrows money. As the imports cannot be paid for by the Pak Rupees it has to balance this with exports. As Pakistan normally has a deficit so it has to borrow from IMF/World bank to balance these books. Pakistan also borrow money to fund infrastructure projects... If you don't pay tax then don't complain for outdated infrastructure (The only thing people do these days is complain).

@Jungibaaz
But nope, "it's coming from Canada, it's got to be better because it's expensive right"

The other time I went to Pakistan, this guy was making me buy gifts using my money for others, even though he was richer than me. But hey, I own Canada, I'm King Charles, got a laptop and gifts factory in backyard and my printer prints dollars 24/7

Totally agree.

 

[SouI]

And why the hell do they control prices ? why don't they let everyone negotiate freely ?

Then what is the point of being a state anyway?

 

[SBD-3]

Only way a government can earn is to increase the tax base. Without doing this, government no matter how hard they try cannot increase its revenue.

Pakistan must find its way to increase the tax base by properly doing the audits and make people earning high, pay tax.

But how to increase the tax base when the big sectors like sole proprietors and agriculture remain out of tax net. Documentation of the economy is the first step but this is such a big political challenge that even Musharraf with all his power failed to get it done. Unless the economy is not documented, the earnings and thus taxation would also remain challenging

Just one simple question to all the contributors? How many of you have got the taxpayer I'd card or are on active taxpayers list?

 

[Jango]

I actually agree with the OP.

Ab jab itna sasta ho gaya hai to lay lo, zyada choo chaan na karo.

 

[SBD-3]

In Pakistans case by the looks of it the state wants to give tax breaks to the textile industry whose products are one of our largest exports. If I understand things correctly, the more we export, the stronger the rupee becomes and the cheaper commodities like oil and gas will become in the future for imports.

The more we export the more stronger rupee becomes and the lesser exports we would then have in future due to strong rupee.

Oil imports have hiked in January. The consumption has picked up drastically.

On a side note. As far as I know, the additional GST has been imposed only on HSD and HOP. Petrol,Kersoine Oil and Furnace Oil are exempt from the additional GSTs

 

[farhan_9909]

The more we export the more stronger rupee becomes and the lesser exports we would then have in future due to strong rupee.

Oil imports have hiked in January. The consumption has picked up drastically.

On a side note. As far as I know, the additional GST has been imposed only on HSD and HOP. Petrol,Kersoine Oil and Furnace Oil are exempt from the additional GSTs

Ishaq dar is good,i appreciate him and perhaps is the only credible person in PMLN.But he still has to do alot of work on export sector

 

[xyxmt]

pakistan has tax rate of 25% and 33% for small and big corporations respectively, which is freakishingly high...Income taxes are also high and so are sales/customs taxes. If they start collecting taxes, businesses will completely shut down and it will have a massive impact on the economy. They need to reduce taxes before they ever try to collect them.

In Canada we pay more than 20% personal income tax (goes to fedral govt), then we pay 14% sales tax on everything we buy (50% goes to fedral and 50% goes to privincial govt), then we pay property tax to our local govt (based on average household value in Toronto I would say about 6,000/year). All in all I pay more than 50% in all taxes combined and that is why we expect our govt to work for us and fix our problems and they do.

I tried to find a single example where people get services without paying, expect if its a ME oil producing country.

 

[SBD-3]

Ishaq dar is good,i appreciate him and perhaps is the only credible person in PMLN.But he still has to do alot of work on export sector

To keep export competitive PKR needs to be allowed to depriciate. Almost every country is devaluing her currency to keep competitiveness in tact. PKR needs around 5-10% depreciation.

 

[Faiez]

In Canada we pay more than 20% personal income tax (goes to fedral govt), then we pay 14% sales tax on everything we buy (50% goes to fedral and 50% goes to privincial govt), then we pay property tax to our local govt (based on average household value in Toronto I would say about 6,000/year). All in all I pay more than 50% in all taxes combined and that is why we expect our govt to work for us and fix our problems and they do.

I tried to find a single example where people get services without paying, expect if its a ME oil producing country.

I'm suggesting shutting down these "services"...google for "free market", I'm a libertarian.

Canadian taxes are very high. USA is still alot more reasonable.

Services are going to cost money, whether govt. does it or whether you do it on your own. It's just a matter of opinion whether govt. should provide it for you or you purchase them on your own and pay little in taxes. I prefer the second option, where you spend your own money your own way, the government just provides a basic law and order/security service and basic infrastructure for a small tax.

Then what is the point of being a state anyway?

it's just politics...there's no point. people just like it.