Nawaz, Fazal say 'No' to RGST
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.