@Roshan Wadhwani

First of all the topic should be rephrased as "Is taxation only way for the survival of economy". It is because "country" is much larger concept and economy is just a part of it.

Secondly, in current capitalist economic structure, taxation is indeed very important for the survival of economy.

Reasons:

1. Taxes are built in stabilizers that control the macroeconomic framework of the economy. For example they can control the overheating of the economy i.e. when aggregate demand is more than the aggregate supply then taxes can reduce the gap between the two.

2. In capitalist economic structure, where welfare is also an objective then necessary funding for welfare are the taxes.

3. With the exception of some Arab oil rich countries, all economies are relying on taxes. The reason being no country is rich enough in natural resources to run the economy by just exploiting natural resources. The other advantage these Arab countries is their low population. so they can have higher per capita natural resources than others.
When their population start increasing and their natural resources start showing signs of depletion (most probably in 2050), they may think of imposing taxes.

4. A country like Pakistan, can not in current circumstances think of its economic survival without taxes even if it is low, otherwise Pakistan will go bankrupt. Our natural resources are no doubt very huge if exploited properly, but still it is difficult to do without taxes.