RGST a fear for in­dus­try

The Pak Banker - - 4editorial -

Re­formed Gen­eral Sales Tax, which is in these days has be­come a word of mouth of ev­ery busi­ness­man, traders and a num­ber of protests have been recorded. Busi­ness­men are feared that the im­ple­men­ta­tion of RGST to hit hard the in­dus­try and con­se­quently it would cre­ate un­em­ploy­ment and due to short­age of prod­ucts price-hike would come into ex­is­tence. Busi­ness­men re­lated to poul­try busi­ness cry­ing on the im­ple­men­ta­tion of the cruel tax (RGST) and urged the govern­ment not to im­ple­ment Re­formed Gen­eral Sales Tax and with­draw the bill im­me­di­ately as it would cause un­due dam­age to the in­dus­try, par­tic­u­larly to the poul­try sec­tor that is al­ready fac­ing var­i­ous chal­lenges. As poul­try in­dus­try feed con­trib­utes 70pc in the cost of pro­duc­tion of chicken meat and eggs. RGST on poul­try feed means RGST on chicken meat and eggs which are es­sen­tial food item for the com­mon man. While jus­ti­fy­ing the im­pos­ing of the tax, the Fi­nan­cial Min­is­ter Sheikh Ab­dul Hafeez said that there would be not tax on poul­try and com­mon man would not be af­fected. When RGST im­ple­mented on poul­try feed, ul­ti­mately it will af­fect meat and eggs. RGST on poul­try feed will in­crease the cost of pro­duc­tion of poul­try farmer which he can­not re­cover from the. In 1996, Govern­ment im­posed 15pc Sales Tax on poul­try feed which re­sulted in clo­sure of 40pc poul­try farms push­ing chicken meat and egg prices by 50pc. Due to de­crease in the quan­tum of the poul­try feed, price of Maize and other Agri­cul­tural byprod­ucts were also de­creased. On the other hand ex­porters have urged the govern­ment not to im­pose RGST on five zero rated sec­tors of in­dus­try. They said it is not an ap­pro­pri­ate time to break the zero-rat­ing regime for tex­tile chain be­cause the ex­port-ori­ented in­dus­try is al­ready stand­ing on dy­ing edge due to in­crease in the util­ity costs. In­spite of im­pos­ing new taxes govern­ment should take mea­sures to stop leak­ages in the tax col­lec­tion sys­tem.

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