Nawaz, Fazal say 'No' to RGST

The Pak Banker - - 4editorial -

While ad­dress­ing a pub­lic gath­er­ing in Sheikhupura some days back Nawaz Sharif has said that his party PML-N will not sup­port the govern­ment on the is­sue of the Re­formed Gen­eral Sales Tax and will not al­low the govern­ment to in­crease the bur­den on the masses. PML chief Nawaz Sharif took a right stand for the wel­fares of the peo­ple and sug­gested the Pak­istan Peo­ple's Party-led govern­ment should fo­cus on elim­i­nat­ing cor­rup­tion in­stead of in­creas­ing taxes. He said now govern­ment should bring a revo­lu­tion and take steps to com­bat the evils faced by the peo­ple. IMF team is here to en­sure im­ple­men­ta­tion of tax re­forms. The re­forms in the gen­eral sales tax to be in­tro­duced through pro­posed Gen­eral Sales Tax Act, 2010 would help achieve the de­sired tar­get of doc­u­men­ta­tion of econ­omy and would re­move ex­emp­tions avail­able to var­i­ous sec­tors. On four­teenth De­cem­ber (Tues­day), Maulana Fazal ur Rehman of JUI also re­jects the RGST im­po­si­tion af­ter an­nounc­ing the dis­as­so­ci­a­tion with the govern­ment in re­ac­tion to the ouster of his party min­is­ter Azam Khan Swati. He said still it not clear the con­cept of RGST and its plus mi­nus to the peo­ple. Ac­cord­ing to the sources some in­for­mal sec­tors are also to be brought un­der GST regime. Doc­u­men­ta­tion re­quired through the pro­posed leg­is­la­tion would not only doc­u­ment each and ev­ery trans­ac­tion af­ter im­port or lo­cal pro­duc­tion at all lev­els but also to help doc­u­ment an­nual turnover of the busi­nesses for de­ter­mi­na­tion of in­come tax li­a­bil­ity of the reg­is­tered en­ti­ties. There is no doubt the State is in dire need of in­creas­ing its tax rev­enues by broad­en­ing its tax, but it is duty of the govern­ment to keep the tax bur­den as low as pos­si­ble and in­creas­ing the num­bers of tax­pay­ers si­mul­ta­ne­ously en­sur­ing that taxes are ap­plied equally and fairly to ev­ery­one. The govern­ment should rather re­duce tax rates on in­come and busi­ness prof­its that help to sharpen in­cen­tives to work and cre­ate wealth in the econ­omy as a strat­egy to en­hance lon­grun growth. The tax base should be broad­ened by levy­ing di­rect taxes on "pay as you earn" ba­sis in­stead of levy­ing fre­quent in­di­rect taxes like RGST.

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