By Mavia Umer BSS-4


Difference between GST and RGST
‡ The primary difference is that GST was applied only to the goods at the final point of sale, whereas RGST would also be applicable on services ‡ The second difference is that RGST waives off exemptions from certain goods which had hitherto been given in the GST regime ‡ Thirdly there has been a rationalization of tax rates.

‡ It disproportionately affects those in lower income brackets than those who earn more ‡ If the economy has to be documented, in terms of widening the tax net, then surely that can be done without having to raise the existing rate of GST ‡ RGST is inflationary and that is something that the economy can ill-afford at this point in time.

‡ RGST will help government formalize a vast segment of undocumented economy ‡ By bringing the undocumented sector in to formal tax net government hopes to increase the direct taxes. ‡ It will help government to increase the total tax collection in the country which stands at dismal 9% of the GDP

Three important government allies Muttahida Qaumi Movement (MQM), Jamiat Ulema-i-Islam (JUI-F) and Awami National Party (ANP) opposed the motions seeking recommendations on the General Sales Tax Bill 2010 and Finance (Amendment) Bill 2010

We will not support RGST even if we are killed

Application of RGST
It will be a tedious task for the PPP to first secure approval for the legislation from the standing committee and then from the National Assembly as the bill s fiercest opponents are drawn from opposition groups as well as allies in the ruling coalition.

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