Demonetize the 5000, 1000 notes in Pakistan?

[Indus Pakistan]

Come on Kaptaan what good it has brought to India? I mean that emotional decision with so much secrecy in our neighbouring country is going to help little with regard to curbing black money.

This was not my idea. I just opened the thread on request of @EpiiC So all credits, criticique and queries should be directed at new member @EpiiC

I am ambivalent about this idea and hold no strong pro or con views. I am following this discussion as a observer.

 

[NHUDA]

Can you PM ? Also how does send inbox people?

Can you PM ? : I don't Know ... How to do so !

Also how does send inbox people?: I don't Know ..


BTW ... WHY ???

 

[EpiiC]

This was not my idea. I just opened the thread on request of @EpiiC So all credits, criticique and queries should be directed at new member @EpiiC

I am ambivalent about this idea and hold no strong pro or con views. I am following this discussion as a observer.

This is a very simple solution in seeking withdrawal of Rs 5,000 and Rs 1,000 currency notes to reduce illicit money flows and encourage people to use banking services. I encourage the government to take steps to withdraw from circulation as legal tender the high denomination Rs 5,000 and Rs 1,000 notes so as to reduce illicit money flows, encourage the use of bank accounts and reduce the size of undocumented economy.....

Can you PM ? : I don't Know ... How to do so !

Also how does send inbox people?: I don't Know ..


BTW ... WHY ???

Sorry mate that wasn't directly meant for you.... however why do you disagree with scrapping the currency?

 

[NHUDA]

This is a very simple solution in seeking withdrawal of Rs 5,000 and Rs 1,000 currency notes to reduce illicit money flows and encourage people to use banking services. I encourage the government to take steps to withdraw from circulation as legal tender the high denomination Rs 5,000 and Rs 1,000 notes so as to reduce illicit money flows, encourage the use of bank accounts and reduce the size of undocumented economy.....


Sorry mate that wasn't directly meant for you.... however why do you disagree with scrapping the currency?

Other than many obvious Reason a Single Google of the Term Demonitization will provide ... i have Itemized my Reason in my original comment.

NO For the Love of God ..

1- B'coz it is a WORST idea .... Given tht we have even Lesser Penetration of Bank accounts, as well as Online Commerce ... also we have a Bigger Shadow / Parallel economy, and we are MORE cash based economy .... And our Population is less educated to understand the scenario resulting in committing suicideconsidering all thr savings are Now ZERO !

2- After indian Action THOSE already hoarding actual Black Money or Illegal cash ... have most probably already converted FURTHER it into GOLD / ForEx / Stocks and Real Estate as well as parking it in Dubai, London

So going through the WHOLE hassle ...will have Even MORE problem for the Common People and Even LESS implication on actual Black money hoarders !!!

 

[EpiiC]

Other than many obvious Reason a Single Google of the Term Demonitization will provide ... i have Itemized my Reason in my original comment.

Modi in 2 years made his population 250M bank accounts.... Pak can take some gradual steps towards this....

 

[Indus Pakistan]

This is a very simple solution in seeking withdrawal of Rs 5,000

Can you again make a strong, detailed case with referances for your idea and then I will make my comments on it. So far most members here are being sceptical, that could be because the Indian's first came up with this idea and thus it has become 'tainted' but still you need to make good presentation. I am open to the idea if you put forth good case for it.

Rs 5,000 note does come across as tad high - it converts to £37 which given in UK the largest note is £100, seems kind of on the high side for Pakistan given far lower salaries/income.

 

[Deadpool]

Epic,

Indians are remarkably short-sighted. They voted out Vajpayee in 2004, they will prolly do so to Modi in 2019, if the current crunch continues.

I agree. Indians are extremely short sighted. Western nations make policies with a much longer term view and voters respect that. Very unlike India.

4-5 main avenues of black money generation/consumption:
1. Govt money being siphoned off from schemes.
2. Black money from inter-state trade
3. Black money in land
4. Black money in gold

Aadhar authentication is already reducing leakage in Govt. schemes.
GST should help a great deal in ensuring generation of black money in trade is minimized.

I am also extremely keen to see this Budget 2017 coming on February. A whole host of economists including the Government's Chief Economic Advisor have recommended reducing the stamp duty. High Stamp duty coupled with High Taxation on profit from sale of property are the reason why real estate transactions happen in cash and why most black money flows in real estate.

Reduction/removal of stamp duty (for buyer) as well as capital gains tax (for seller) will massively curb generation of black money from real estate sector.

I think the probability that Govt. will introduce this in the coming Budget is very high.

 

[Indus Pakistan]

@Indian members @Pakistani members

Can somebody list three row chart with comparative notes in circulation with, Rs Indian, Rs Pak and conversion into UK sterling please. Thanks.

@EpiiC

 

[Spring Onion]

Can you again make a strong, detailed case with referances for your idea and then I will make my comments on it. So far most members here are being sceptical, that could be because the Indian's first came up with this idea and thus it has become 'tainted' but still you need to make good presentation. I am open to the idea if you put forth good case for it.

Rs 5,000 note does come across as tad high - it converts to £37 which given in UK the largest note is £100, seems kind of on the high side for Pakistan given far lower salaries/income.

O yara the black money owners do not keep as much case. Most of the black money is invested in property or other such businesses and to avoid tax the same black money is used. Now since India did take such a decision and some voices are heard in Pakistan too hence do you think those who posses black money would be sleeping ? or they did not ensure that nothing happens to their money stockpile .

Pakistan every now and then scrape big notes or old notes and replace with new ones so it is nothing new.

 

[SoulSpokesman]

Epic,

Pak can take some gradual steps towards this....

If my friend Brof Riazul Haq is correct that every Baki has a Unique ID no, it shudnt be difficult. Actually, there is a possibility that you cud have a bank account number which is the same as your UID no. For instance, you cud be assigned a default bank ac no which wud be your bank code followed by the UID no. You login thru a registered mobile no, press your MPIN no and get going.

I am told already there is an interface in India called the UPI wherein you can transfer money from one account to another using barely 4 or 5 commands. You can google search it. I intend to try it out for knowledge sake.

Regards

 

[EpiiC]

@Indian members @Pakistani members

Can somebody list three row chart with comparative notes in circulation with, Rs Indian, Rs Pak and conversion into UK sterling please. Thanks.

@EpiiC

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[SoulSpokesman]

Spring Onion,

To answer your question, much BM gets parked as benami real estate or stock exchnage investments thru something called Promissory Notes. By reducing tax rates and outalwing benami RE/Investments, the menace can be tackled.

Regards

 

[H!TchHiker]

Spring Onion,

To answer your question, much BM gets parked as benami real estate or stock exchnage investments thru something called Promissory Notes. By reducing tax rates and outalwing benami RE/Investments, the menace can be tackled.

Regards

By reducing tax rate it is simply called "Kal dhan Safed kara lo" more professional termed used as amnesty scheme.. It is happened in Pakistan too many times this motivate one self and others not to pay the tax again..As stated earlier why would i pay TAX now if later i can get away by paying less amount..No to mention the intrinsic gain that person earned during that period.

This is a very simple solution in seeking withdrawal of Rs 5,000 and Rs 1,000 currency notes to reduce illicit money flows and encourage people to use banking services. I encourage the government to take steps to withdraw from circulation as legal tender the high denomination Rs 5,000 and Rs 1,000 notes so as to reduce illicit money flows, encourage the use of bank accounts and reduce the size of undocumented economy.....


Sorry mate that wasn't directly meant for you.... however why do you disagree with scrapping the currency?

I have some questions

1) Withdrawal of Rs 5,000 and Rs 1,000 currency notes to reduce illicit money flows ? What is illicit money ?

2) Encourage the use of bank accounts ?, Lets say i have bank account how can government stop illict money in it ?

3) Reduce the size of undocumented economy ? Yes that is relevant point agreed...but it has no link with demonetization

 

[EpiiC]

By reducing tax rate it is simply called "Kal dhan Safed kara lo" more professional termed used as amnesty scheme.. It is happened in Pakistan too many times this motivate one self and others not to pay the tax again..As stated earlier why would i pay TAX now if later i can get away by paying less amount..No to mention the intrinsic gain that person earned during that period.



I have some questions

1) Withdrawal of Rs 5,000 and Rs 1,000 currency notes to reduce illicit money flows ? What is illicit money ?

2) Encourage the use of bank accounts ?, Lets say i have bank account how can government stop illict money in it ?

3) Reduce the size of undocumented economy ? Yes that is relevant point agreed...but it has no link with demonetization

Illict money as in black money, tax evasion money....its for those that currently don't have bank and for them to continue using the banking system..... You must keep in mind that maybe 1Million people are paying taxes...Only 0.57% of Pakistanis, or 768,000 people out of a population of 190 million pay income tax. Pakistan is in a terrible situation..... absolutely horrendous....do you want me to compare Pak with countires 20 times smaller?

 

[H!TchHiker]

Illict money as in black money, tax evasion money....its for those that currently don't have bank and for them to continue using the banking system..... You must keep in mind that maybe 1Million people are paying taxes...Only 0.57% of Pakistanis, or 768,000 people out of a population of 190 million pay income tax. Pakistan is in a terrible situation..... absolutely horrendous....do you want me to compare Pak with countires 20 times smaller?

1 )Only 0.57% of Pakistanis, or 768,000 people out of a population of 190 million pay income tax. Pakistan is in a terrible situation....Yes i agree with this it is horrible and i am saying the same thing..I just differ on the cause of illness.The main reason is exemptions and lower net tax base. With a tax-to-GDP ratio of 11.5%, Pakistan falls close to the bottom in the ranking of countries .68% of the tax revenue being generated from indirect taxes .See where the gaps are.

2) Tax evasion...You are right but again cause of illness is not 1,000 or 5,000 notes . So by scrapping it nothing will achieve.You can treat headache with disprine but not tumor..What is cause here ? Deficiencies in Tax law.. Lets say somebody needs to pay me an amount in Pakistan and i don't want FBR to question it. I will ask him to sent me abroad by Money changers and then i transfer it back to my account in Pakistan or at my father account. No body can question this money now.Why Oversears are exempted of declaring source and pay tax on remittance. Look it is LEGAL Now. In spirit it is illegal/black or whatever.I have stated the easiest way..There are 10 other ways to do it..

3) Agriculture sector in Pakistan contributes around 21% of total gross domestic product (GDP), but the cumulative collection of agriculture tax is less than 1% of the total.See it has nothing to do with notes again. Cause is regressive tax..Same is the case with Real Estate business.


Reasons
An inefficient tax administration, exemptions, amnesty schemes, complex and non-transparent tax system, corruption and tax evasion, and a non-supportive political environment that does not want to increase tax base. i agreed with you on encouraging the people to use Banks and document the undocumented economy which in essence means the same i.e Increase Tax to GDP.
Without this you can demonetize 10 times nothing will change.