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    Tax Evasion

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    hunaiza khan
    Tax evasion involves the unlawful non-payment or underpayment of taxes through means such as submitting incorrect tax returns, omitting income, or claiming inadmissible deductions. It is distinct from legal tax avoidance or planning. Common causes of tax evasion in Pakistan include tax amnesties, a negative role of tax officials, loopholes in the tax system, and lack of documentation. Modes of evasion include hiding information, reporting lower income, and dealing in black money. Tax evasion has negative impacts on Pakistan's economy such as a low tax-to-GDP ratio and higher fiscal deficits. Recommendations to address evasion include depoliticizing the tax department and offering incentives to compliant taxpayers.

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    Tax Evasion

    Uploaded by

    hunaiza khan
    24 views14 pages
    Tax evasion involves the unlawful non-payment or underpayment of taxes through means such as submitting incorrect tax returns, omitting income, or claiming inadmissible deductions. It is distinct from legal tax avoidance or planning. Common causes of tax evasion in Pakistan include tax amnesties, a negative role of tax officials, loopholes in the tax system, and lack of documentation. Modes of evasion include hiding information, reporting lower income, and dealing in black money. Tax evasion has negative impacts on Pakistan's economy such as a low tax-to-GDP ratio and higher fiscal deficits. Recommendations to address evasion include depoliticizing the tax department and offering incentives to compliant taxpayers.

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    Tax evasion involves the unlawful non-payment or underpayment of taxes through means such as submitting incorrect tax returns, omitting income, or claiming inadmissible deductions. It is distinct from legal tax avoidance or planning. Common causes of tax evasion in Pakistan include tax amnesties, a negative role of tax officials, loopholes in the tax system, and lack of documentation. Modes of evasion include hiding information, reporting lower income, and dealing in black money. Tax evasion has negative impacts on Pakistan's economy such as a low tax-to-GDP ratio and higher fiscal deficits. Recommendations to address evasion include depoliticizing the tax department and offering incentives to compliant taxpayers.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    24 views14 pages

    Tax Evasion

    Uploaded by

    hunaiza khan
    Tax evasion involves the unlawful non-payment or underpayment of taxes through means such as submitting incorrect tax returns, omitting income, or claiming inadmissible deductions. It is distinct from legal tax avoidance or planning. Common causes of tax evasion in Pakistan include tax amnesties, a negative role of tax officials, loopholes in the tax system, and lack of documentation. Modes of evasion include hiding information, reporting lower income, and dealing in black money. Tax evasion has negative impacts on Pakistan's economy such as a low tax-to-GDP ratio and higher fiscal deficits. Recommendations to address evasion include depoliticizing the tax department and offering incentives to compliant taxpayers.

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    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    of 14

    TAX EVASION

    By Eishaal Fatima
    Hunaiza Khan
    It includes,
    • submitting an incorrect return due
    WHAT IS TAX
    EVASION? to gross negligence
    • fraud,
    Unlawful non payment or under payment • omission,
    of tax by individuals, companies or other
    entities.
    • understatement of income,
    • the deduction of an inadmissible or
    fictitious expenditure, or loss
    NOT TAX AVOIDANCE
    OR TAX PLANNING

    • Tax avoidance is the use of legal


    methods of reducing taxable income or
    tax owed. Claiming allowed tax
    deductions and tax credits are common
    tactics, as is investing in tax-advantaged
    accounts
    • tax planning is a systematic and legal
    process of using an entity’s permissible
    exemptions, deductions, and other lawful
    provisions to curtail its tax burden.
    CAUSES OF TAX EVASION

    • Repeated tax amnesties


    • Negative role of tax officials
    • Compliance an exception
    • Low literacy and high inflation
    Tax evasion • Exemption for certain sectors
    • Loopholes and confusion in tax system
    • Increase in taxes not in tax payers
    • Lack of documentation
    MODES OF TAX EVASION

    False
    claims for
    Hiding exemption Foreign
    information accounts

    Reporting Dealing in
    income black
    lower money

    Deliberatel
    Misleading y not
    Tax Evasion
    financial sta paying the
    tements tax
    • Filing ITR using Incorrect Tax Form
    • Mentioning incorrect personal or
    correspondence details
    • Filing incorrect and incomplete bank
    details
    COMMON MISTAKES
    • Not reporting interest income from
    LEADING TO TAX EVASION
    Saving bank accounts, Fixed
    deposits etc.
    • Not keeping evidence of deductions
    claimed in income tax return
    • Non-filing or late fiing of income tax
    returns
    • Submitting Fake Invoices/ giving
    wrong disclosure
    • Not claiming correct deductions
    UNDERGROUND ECONOMY

    • It is an economy where all the


    transactions that take place are
    unrecognized by the government.

    1. Legal
    2. Illegal
    Underground
    economy

    legal illegal

    self Money
    employment Bartar trade laundering etc
    NON FILING OF TAX. 182A

    1) 0.1% of the taxable


    1) Where a person makes a
    income for each day. false or misleading
    A) If a person fails to statement: a penalty of
    2)75% is salaried income furnish a wealth twenty-five thousand
    then min 10,000 and max rupees.
    50,000.
    statement: 0.1 % per
    2) any person who, without
    week. reasonable excuse, fails to
    3)tax return not filed within —
    the due dates , no name in B) A person fails to (a) comply with a notice
    the active tax payer’s list. furnish foreign assets under subsection (3) and
    A) 20,000 in case of the : penalty of 2 percent sub-section (4) of section
    company. 114 shall commit an offense
    of the foreign punishable on conviction
    B) 10,000 AOP.
    income for each year with a fine or imprisonment
    C) 1000 in case of a person.
    for a term not exceeding one
    year, or both
    • Pakistan is ranked 139th out of 176 countries
    on Transparency International's corruption
    perceptions index, with weak auditing and
    budgeting procedures.
    • Pakistan's fiscal deficit of Rs 3.403 trillion
    (Rs3403 billion) in 2020-21.
    STATISTICS
    • According to the Pakistani federal board of
    revenue, active taxpayers (NTN holder) has
    declined to 30%.
    • About 2-2.5 % of total population is NTN
    holders.
    PROVINCE-WISE TAX COLLECTION

    tax collection

    Sindh 44.91% Punjab 34% ICT 15% KPK 3.54% Balochistan 1.67% GB 0.12%

    *Karachi alone paying tax of 41.39% .


    TAX EVASIVE INDUSTRIES

    Tax evasion

    100

    90

    80

    70

    60

    50

    40

    30

    20

    10

    0
    tea real estate tyre tobacco pharmaceuticals

    Column3 Column2 Column1


    1.Tax-to-GDP ration is so low.
    2.Higher tax gap.
    3.Higher administrative costs of
    taxation.
    IMPACTS OF TAX EVASION
    ON PAKISTAN’S ECONOMY 4.Lower revenue indirect taxes.
    • Depoliticize the taxation dept.
    • Tax rates should be revised.
    • Strict system of accountability.
    • Efficient, well-educated, highly
    RECOMMENDATION trained staff should be recruited.
    • Expenditures of personal benefit
    should be cut down.
    • Regular and compliant tax payers
    should be offered different
    incentives.

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