02:45
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ISLAMABAD: Tax authorities have estimated that the size of informal economy stood in the range of 31.4 to 44 percent of gross domestic product (GDP), according to official documents of the Federal Board of Revenue (FBR).
The proposed amnesty scheme will give last opportunity to avail after approval of the parliament to those who are major beneficiaries of huge volume of black economy, it said.
“Unfortunately, Pakistan has a large percentage of underground economy. It is difficult to estimate the exact volume but different studies have estimated the size of underground / informal economy in the range of 31.4 percent to 44 percent of the GDP,” according to the documents.
The FBR’s working also referred other studies done in the past in order to give policymakers a candid comparison to reach the rationale decision.
Referring to the World Bank’s research done in July 2010, it said that the size of informal economy stood at 36.7 percent of GDP. The State Bank of Pakistan had estimated the size of informal economy at 27.3 percent in 2000s and 28.6 percent in 1990s.
According to the Global Financial Integrity Organization paper on Illicit financial flows from developing countries 2000-09 (December 2011), the illicit financial flows was estimated at $1,449 million.
According to the research conducted by Ali Kemal of Pakistan Institute of Development Economics (PIDE) for 2007-08, Pakistan’s formal GDP was half the GDP. However, it is still an underestimated figure since investment data is not adjusted. The informal economy is 91.4 percent of the formal economy, he revealed during the last PIDE conference held in Islamabad in November.
However, the FBR has informed the prime minister, the finance minister and other cabinet ministers that several countries in recent past have provided opportunity to whiten income in their respective countries.
The proposed amnesty scheme will give last opportunity to avail after approval of the parliament to those who are major beneficiaries of huge volume of black economy, it said.
“Unfortunately, Pakistan has a large percentage of underground economy. It is difficult to estimate the exact volume but different studies have estimated the size of underground / informal economy in the range of 31.4 percent to 44 percent of the GDP,” according to the documents.
The FBR’s working also referred other studies done in the past in order to give policymakers a candid comparison to reach the rationale decision.
Referring to the World Bank’s research done in July 2010, it said that the size of informal economy stood at 36.7 percent of GDP. The State Bank of Pakistan had estimated the size of informal economy at 27.3 percent in 2000s and 28.6 percent in 1990s.
According to the Global Financial Integrity Organization paper on Illicit financial flows from developing countries 2000-09 (December 2011), the illicit financial flows was estimated at $1,449 million.
According to the research conducted by Ali Kemal of Pakistan Institute of Development Economics (PIDE) for 2007-08, Pakistan’s formal GDP was half the GDP. However, it is still an underestimated figure since investment data is not adjusted. The informal economy is 91.4 percent of the formal economy, he revealed during the last PIDE conference held in Islamabad in November.
However, the FBR has informed the prime minister, the finance minister and other cabinet ministers that several countries in recent past have provided opportunity to whiten income in their respective countries.
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