Saturday, 2 July 2016

Economy, Revenue Collection and GDP of Karachi.

The economy of Karachi.

Karachi is referred as the financial capital of Pakistan; it accounts for most of Pakistan's revenue collection.

Total collections of the Federal Board of Revenue in Karachi are 53.38%. 53.33% are customs duty and sales tax on imports.

Total collections of the Value-added Tax in Karachi are 56%, which is generated from whole Pakistan with a major share of generation from Punjab.

Karachi indigenously produces about 30 percent of value added Tax in large scale manufacturing.

Karachi's indigenous contribution to national revenue is 25%.

Karachi’s indigenous GDP is around 20% of the total GDP of Pakistan.

Revenue Collection in Karachi.

In line with its status as a major port and the country's largest metropolis, it accounts for most of Pakistan's revenue collection.

According to the Pakistan Federal Board of Revenue's 2006-2007 year book tax and custom units in Karachi was responsible for 46.75% of direct taxes, 33.65% of federal excise tax, and 23.38% of domestic sales tax.

Karachi also accounts for 75.14% of customs duty and 79% of sales tax on imports.

Therefore, Karachi collects a significant 53.38% of the total collections of the Federal Board of Revenue, out of which 53.33% are customs duty and sales tax on imports.

Revenue collected from Karachi includes revenue from some other areas since the Large Tax Unit (LTU) Karachi and Regional Tax Offices (RTOs) Karachi, Hyderabad, Sukkur and Quetta cover the entire province of Sindh and Baluchistan.

Karachi's indigenous contribution to national revenue is 25%.

GDP of Karachi.

A substantial chunk of Sindh’s GDP is attributed to Karachi.

The GDP of Sindh as a percentage of Pakistan’s total GDP has traditionally hovered around 29%/30%.

Karachi’s indigenous GDP is around 20% of the total GDP of Pakistan.

A PricewaterhouseCoopers study released in 2009, which surveyed the 2008 GDP of the top cities in the world, calculated Karachi’s GDP (PPP) to be $78 billion. Lahore $40 billion and Faisalabad $14 billion.

Karachi's high GDP is based on its large industrial base, other than multinationals, mostly owned by the Punjabis and Gujaratis, with a high dependency also on the financial services sector due to the head offices in Karachi.

Textiles, cement, steel, heavy machinery, chemicals, food, banking, and insurance are the major industrial sectors contributing to Karachi's GDP.