Questions related to economy; Plz help

[rose_pak]

1. What is total GDP of Pakistan? mention source also.



2. What is defference between "balance of Payment ($ 1.2 bn)" and "trade deficit ($12 bn)"?


3. What is difference between "paying taxes" and "filing tax returns"?

[mjkhan]

Ans 2. balance of payment is the value of all non-tangible services such as banking,insurance,shipping...

difference between balance of payment arises when the total reciepts in a particular year exceeds the total payments and vice versa.


balance of trade is the value of all tangible goods transferred(imported/exported)

trade deficit arises when total imports exceeds total exports.for example we exported goods of worth rs. 20000 in a particular year and imported goods of worth rs.30000 so there will be a trade deficit of 10000 in that particular year.

Ans 3. a tax return is a tax form that is filed to the concerned tax authority.

payment of taxes means the tax paid as assessed according to the tax return.

[rabia butt]

what do we mean by tax-GDP ratio?
what is fiscal deficit?
whats circular debt?
what are the sources of direct and indirect sources?

[mjkhan]

Originally Posted by rabia butt

what do we mean by tax-GDP ratio?
what is fiscal deficit?
whats circular debt?
what are the sources of direct and indirect sources?

tax to gdp ratio is the ratio of tax collection against the national GDP.



fiscal deficit occurs when the govts total expenditure exceeds total revenue(excluding borrowing).

circular debt

let us understand it like this.i owe rabia butt,rabia butt owes rose_pak, and rose pak owes mjkhan...now jab tak ma ap ko pesay nahee don ga ap rose pak ko payment nahee kar sakain gee aur jab tak ap rose pak ko payment nahee kar sakain gee rose pak mujhey payment nahee kar sakain gey..and this is how a circular debt circle is formed..

sources of direct indirect taxes

direct taxes may be income tax,corporate tax etc

indirect tax may be sales tax,value added tax etc(indirect tax is not directly submitted to the govt. by the payee of he tax)

[rose_pak]

Originally Posted by rabia butt

what do we mean by tax-GDP ratio?

the ratio of tax to the total GDP (gross domestic product) within a country in any given year. For example if the total GDP is $164 bn and the taxes, we have collected in a given year, are $16 bn. this means out tax to GDP ratio is 10%

Originally Posted by rabia butt

what is fiscal deficit?

fiscal deficit means the difference between the revenue and the expenditure of a country. for example Pakistan's budget is 2.7 trillion while the revenue is 1.95 trillion. the difference between these two would be fiscal difict which is 850 billions in case of Pakistan.

Originally Posted by rabia butt

whats circular debt?

Circular debt is that debt which keeps circulating, especially in our power sector. The power companies cannot pay the oil companies due to non receipt of payments from power distributors due to inability of power consumers to pay for the power. in short, it is that debt which is un-paid and keeps disturbing all stakeholders whithin the power sector.

Originally Posted by rabia butt

what are the sources of direct and indirect sources?

Sorry, could you please repeat your question? I could not understand.

[rabia butt]

oops sorrey ...i wanted to ask what are the sources of direct and indirect taxes?and out of direct and indirect,which can be evaded?

what is the difference between fiscal deficit and trade deficit?and which one needs to get favourable first?

[rabia butt]

let us understand it like this.i owe rabia butt,rabia butt owes rose_pak, and rose pak owes mjkhan...now jab tak ma ap ko pesay nahee don ga ap rose pak ko payment nahee kar sakain gee aur jab tak ap rose pak ko payment nahee kar sakain gee rose pak mujhey payment nahee kar sakain gey..and this is how a circular debt circle is formed...

my question is,is it that iam totally dependant on from ur recovery.aint it possible i could have other revenue sources to pay rose pak and so on.........??

1 more question....umm is it necessary that tax to gdp ratio should be 100%? i mean in an example u quote above its 10%,say,how do we know that tax-gdp ratio is poor?what are the indicators?iam so sorrey i've posted several times fr questions.its because questions bombarded after intervals

[shtanzeel]

Originally Posted by rabia butt

oops sorrey ...i wanted to ask what are the sources of direct and indirect taxes?and out of direct and indirect,which can be evaded?

direct taxes(that is taxes which place the incidence at the one on whom it is intended) have major source Income Tax.
Indirect include Sales Tax etc. (i.e. their incidence can be transferred)

[khanbaba512]

Originally Posted by rabia butt

1 more question....umm is it necessary that tax to gdp ratio should be 100%? i mean in an example u quote above its 10%,say,how do we know that tax-gdp ratio is poor?what are the indicators?iam so sorrey i've posted several times fr questions.its because questions bombarded after intervals

NO..None of the countries have 100% tax to GDP ratio..We have persistent deficit budgets and we have to finance our budget with AID..thats why we have to improve our tax-to-GDP ratio..let me explain this in this way..We have to generate revenur to finance diffrent projects..to pay salaries for services..to start new projects..for education sector ,medical sector etc etc..for this we need money..and for money we need taxes and other sectors which can generate income..if we can't generate enough income from other sources then we have to rely on taxes...so if we need more money we have to seek diffrent sources of revenue and for when we examine our tax to GDP ratio ..it is low as compared to other developing countries..so in order to gain more revenue we have to generate more taxes...Ab smjh ayi??

[shtanzeel]

Originally Posted by khanbaba512

NO..None of the countries have 100% tax to GDP ratio..We have persistent deficit budgets and we have to finance our budget with AID..thats why we have to improve our tax-to-GDP ratio..let me explain this in this way..We have to generate revenur to finance diffrent projects..to pay salaries for services..to start new projects..for education sector ,medical sector etc etc..for this we need money..and for money we need taxes and other sectors which can generate income..if we can't generate enough income from other sources then we have to rely on taxes...so if we need more money we have to seek diffrent sources of revenue and for when we examine our tax to GDP ratio ..it is low as compared to other developing countries..so in order to gain more revenue we have to generate more taxes...Ab smjh ayi??

Agreed,
Even we can get rid of aid through good tax to gdp ratio. borrowing is always termed fruitful for development expenditure, because it augments tax to gdp ratio and enables us to generate good revenue(only if there is good tax to gdp ratio) and repay our debt.