Definition of General Sales Tax

Taxes are an important part of financing the programs needed to keep a state running efficiently. Some states have a break from their sales tax rates on specific items periodically. For example, consumers may pay no taxes on school supplies shortly before school begins.

General sales tax is the default tax rate placed on all goods sold in a country, state, city or town. All commodities sold in the jurisdiction are subject to that tax rate, unless a specific law states otherwise.

Taxes, including general sales tax, are used to pay for the salaries of civil servants like police officers and firemen, fix roads and schools and help finance programs for low-income residents.

Introduction of Tax and Implementation of Reformed GST in Pakistan
1. Pakistan is in dire need of increasing its tax revenues by implementing a broad-based modern form of
sales tax on goods and services. The Sales Tax Act, 1990, was originally designed on the basis of accepted value added taxation doctrines but due to political compromises and revenue exigencies, it increasingly became distorted and narrow-based because of ever-expanding exemptions, special regimes, multiplicity of rates and several other deviations from international best concepts and practices. Resultantly, not only the tax base of sales tax and income tax has been eroded but also lack of documentation of the national economy has proved a big hindrance in the development of effective tax policy options.

2. Under the existing constitutional framework, the Federal government can impose taxes on the sales
and purchases of goods imported, exported, produced, manufactured or consumed. The Federal government has been levying excise duty on services. After passage of the 18th Constitutional Amendment, taxation of services now wholly falls within the domain of Provincial governments.

3. Presently, apart from sales tax on the supply and import of goods, Federal excise duty is chargeable
on communication (including telecom) services, certain categories of advertisements, insurance services other than life, marine, health and crop, banking services, franchise services and services provided by property developers/promoters, stockbrokers and port/terminal operators. Besides, Provincial sales tax is chargeable on services provided by hotels/clubs/caterers, custom agents, ship chandlers and stevedores, courier services and advertisements on TV & radio. Except franchise services, Federal excise duty and Provincial sales tax on all the aforesaid services is being collected under GST mode with backward and forward cross-crediting (inter-tax adjustment) with Federal sales tax.

4. Tax-to-GDP ratio on account of the said sales taxes has stagnated on lower side although
internationally, the standard rate of 17 percent sounds on higher side. The principal reason of lower tax to GDP ratio of sales taxes has been widespread and unbridled concessions and waivers on both local supply and import stages including zero-rating on several categories of domestic supplies, besides noncoverage of the services sector in general.

5. The consultations with tax professional circles have over the passage of time convinced that there is
an overdue need to thoroughly reform and revamp the whole existing sales tax system to bring it closer to international standards. The new GST system will change the mindset of the public at large as well as of the tax machinery and will strengthen government s efforts to formally depart from excise-style of sales taxation on goods and services.

6. The GST Bill, 2010 will replace the present Sales Tax Act, 1990. While the issues of collection and
administration of sales tax on services are being separately negotiated with the Provinces in the light of recent NFC award, a provision has been included in the Federal Bill to integrate Provincial sales tax on services with the Federal sales tax on goods as and when the Provinces authorize FBR to collect and administer sales tax on services.

7. Under the new GST law, exemptions have been kept intact in respect of basic food items including
wheat, rice, pulses, vegetables, fruits, live animals, meat and poultry etc. Edible oil chargeable to Federal excise duty will remain exempt from GST as before. Exemptions earlier available for philanthropic, charitable, educational, health or scientific research purposes or under international commitments/agreements including grants-in-aid will also continue. Moreover, life saving drugs, books and other printed materials including newspapers and periodicals have been kept exempt.

8. Local consumption of sectors like textile (including carpets), leather, surgical and sports goods has
however, been subjected to tax. Similarly, defence stores, stationary items, dairy products, pharmaceuticals (other than lifesaving), agricultural inputs, agricultural machinery and implements, aviation/navigation equipments including ships & aircrafts etc. have also been proposed to be taxed. Acquisition of capital goods will be facilitated through expeditious adjustment/refund of input tax involved therein.

9. GST will be chargeable only on value added component of each stage of the supply chain. Due to the
provision for set-off of the tax paid at earlier stages in the chain, net tax incidence remains as a single stage levy. Due to automatic input tax adjustment facility, businesses are attracted towards voluntary registration so that they may avail such adjustments and improve their cash flows. For this reason, GST always promotes documentation and encourages self-compliance.

It will however. it has a long-operating sales . Other salient features of the new GST system are as follows.  Cash flow of businesses shall be facilitated through expeditious centralized (Electronic) refund payment system.  The new GST system will be applied in FATA/PATA.10. increase the overall tax-to-GDP ratio from the present below 10% to about 12% in next 3-5 years.  The GST system will work purely on self-assessment and self-policing basis. retail price-based tax or special tax scheme under the new GST system.5 million (which is presently Rs. The proposed GST system will certainly not generate any sudden increase in revenue yield.  GST will apply on both at import and local supply stages.  A uniform enhanced annual exemption threshold of Rs. the Province of Gilgit-Baltistan and AJ&K in due course. appeal and alternative dispute resolution (ADR) systems have been provided as before.  Standard rate of 15% has been proposed instead of the present rate of 17% or multiple other rates going upto 25%.  Adjudication.  There shall be no fixed tax.  All exports shall be zero-rated.  FBR will issue simplified rules to regulate the GST procedures and processes. reduced tax.  Tax compliance shall be encouraged through transparent and fair audit system with increased use of modern information technology.  GST will replace the existing regimes of sales tax and excises on services.  Input tax adjustment of both direct and indirect constituents shall be allowed on totals basis (excluding entertainment and non-business use passenger vehicles).  Sales tax on goods and services where so authorized by the Provinces shall be mutually adjustable so that double taxation does not occur. 5 million) shall be applied to keep small businesses including small traders/retailers/cottage industry out of mandatory tax compliance. Pakistan has a strong potential to implement such value added tax type sales tax because of the reason that besides having a properly-reformed collection infrastructure.  The GST Bill 2010 shall take effect from such date as may be notified by the Federal government.  No general zero-rating shall be admissible on any commercial form of domestic supply or on any local consumption. 11.7. enhanced tax.

Reformed GST is also likely to progressively minimize the grey component of the national economy and facilitate fair income redistribution.  The rate of FED on natural gas has been increased to Rs.  It will broaden the tax base instead of burdening the existing tax payer. levy of FED @ 10% ad valorem on air conditioners and deep freezers is proposed. 1 per filter rod of cigarettes has been proposed. ·  Existing system of General Sales Tax would be reformed to eliminate multiple tax rates and replace it with a single lower rate of 15%. 200. 7.  Current 1% Special Excise Duty levied on most items of imports and local manufacture has been abolished.5 million per year whereas the current threshold is Rs 5 million per year and would be automated thus reducing possibilities of corruption and refund delay.000 taxpayers.000. Once the reform GST is in place the proposed single lower rate of 15 % will become effective.  As an interim measure the GST rates are proposed to be raised by 1 percentage point. .000 to Rs.  On income tax side. It will rather promote economic equity and enable the country to direct national resources towards more productive goals of national development. 10 per MMBTU.  The proposed GST reform is expected to be in place by October 1. exemption limit for the salaried taxpayers has been enhanced from Rs. 2010 in consultation with all the provinces and other stakeholders. benefitting approximately 430. The proposed GST system is expected to operate without any serious inflationary impact.  The reformed GST will not apply on system and substantial hidden sales taxation on inputs of exempt outputs (exempt supplies are input taxed) is already being borne in the aggregate national consumption. education and food items consumed by the poor. 12.  Federal Excise Duty incidence on all categories of cigarettes has been enhanced and levy FED at Rs. National Budget for the financial year 2010-11 and Tax Measure Following are the highlights of tax measures announced by the government in the National Budget for the financial year 2010-11. It will eventually cast healthy impact on income tax receipts and enhance fool-proof tax culture in the country.300. The GST will not apply to turnover less than Rs. while intensive appliances.

000 to Rs. 100.5% where they are held for more than six months and less than 12 months. However.  Rate of final withholding tax on non-specified payments to nonresidents is to be reduced from 30% to 20%.000 taxpayers.  Taxation on interest free / concessionary interest loans provided by an employer is proposed to be waived. will be charged at 0. Exemption limit for non-salary income is also proposed to be raised from Rs.  It has been proposed that income tax be raised for the Association of Persons (AOPs) at a flat rate of 25% against the existing progressive rate averaging up to 20%.  Rate of income tax collected along with monthly electricity bill from industrial and commercial consumers is proposed to be reduced from 10% to 5%. modernization and replacement to all companies. pay order. stocks held for over one year will not be subject to CGT. This will provide a relief of Rs.  Under the Prime Minister s Fiscal Relief Package to Khyber Pakhtunkhwa.25000 in a day.  A 5% tax credit is proposed to be allowed to a company in the tax year of its enlistment. Federally Adminstered Tribal Areas (FATA) & Provincially Adminstered Tribal Areas (PATA) additional tax relief of about Rs.  A withholding tax on banking transactions including withdrawal through demand draft.4. . RTCs.2 Billion have been provided to benefit 300.  Tax free payments to non-residents on profits on debt will be allowed 10% tax credit for balancing. now only quarterly withholding statement will be required to be e-filed. 300.  Instead of monthly withholding tax statements.  Tax on short-term Capital Gains on stocks/shares will be charged at 10% where shares are held for a period less than six months and at 7. CDRs etc.000 taxpayers.000 taxpayers of the province.3% where such transaction exceeds Rs.000 per year benefitting approximately 350.5 billion to the 66.  The withholding tax rate payable by commercial importers is proposed to be increased from 4% to 5%.  10% withholding tax has been announced as final charge on profit on debt (in debt instruments) and also for the investment in government securities (treasury bills and PIBs) to allow hassle free compliance by non-residents.

Mr Bajwa said the finance minister had clearly indicated in his budget speech that a reformed GST regime would be introduced. ³The message is clear. Finance Ministry¶s Special Secretary Asif Bajwa told journalists here on Wednesday that there was no threat to the IMF programme because of any issue. Turnover tax on loss making companies and AOPs is proposed to be increased from 0.5% to 1%. and instead impose an upgraded version of general sales tax (GST) from Oct 1.´ . He said the issue had been politicised and some sections had failed to understand that the GST was also a form of VAT.  Withholding tax on domestic air travel is proposed to be charged at 5% on gross value of the ticket. including VAT. Reformed GST: new label for VAT ISLAMABAD: The ministry of finance has decided to stop using the term of µvalue added tax¶ because of strong opposition to it from various quarters.

Another senior official of the Federal Board of Revenue also said that the present GST regime was in fact µVAT¶. ³The IMF cannot refuse to hold negotiations after the new developments on VAT. . ³The International Monetary Fund has not refused to hold further negotiations with Pakistan. It is expected that the government will try to convince the IMF authorities on the issue and final decisions will be taken by the IMF executive board in August. the special secretary said an integrated VAT on goods and services with an option of allowing a province to tax some services and giving collection rights to the federal government on some would create complications. He said the GST regime had been there for over 20 years and the experience was vital for expanding its scope. ³The government will incorporate all the documentation requirements of VAT in the reformed GST regime at the uniform rate of 15 per cent. Dr Shaikh said that the government intends to introduce GST in its original format. ³which is actually a VAT´.´ Answering a question. Enforcement of RGST ISLAMABAD: Federal Finance Minister Dr Hafeez Shaikh announced here on Thursday that the reformed General Sales Tax (GST) would be enforced from Oct 1. Talking to newsmen. He said there would not be any serious implication for revenue generation in switching between the VAT and GST modes.The official said the finance ministry would hold consultations with the provinces during the July-September period. but added hat exemptions given to various sectors would be withdrawn. He said IMF teams would visit the country soon to hold routine discussions and prepare a report for their executive board.´ he said.´ he said. eliminating all exemptions. He said there was not even a remote chance that the release of next instalment under the standby arrangement with the fund would be withheld. He said the GST was already in force in the VAT mode and further improvements would be made in coming months.

capturing the features of a VAT. and a revised budget would be submitted to the federal cabinet and presented to the National Assembly and Senate standing committees on finance and revenue. The decision of the government to introduce GST has now buried the issue of VAT which became controversial following differences between the federal and provincial governments on modalities of VAT. The finance minister disagreed with newsmen on use of term mini-budget or financial emergency . the finance minister said that education is the biggest responsibility of the government. Dr Hafeez Shaikh said that the ministry of finance was currently working on formulating new taxes with the objective of taxing the affluent class. Dr Shaikh said has the lowest tax-to-GDP ratio in the world. GST already exists in Pakistan. Responding to questions about financial crisis of universities. with only nine per cent.The original form of GST has been distorted by exemptions. but worsened after the devastation caused by floods. The government would now withdraw the five VAT bills submitted to the national and provincial assemblies. The government does not want to get loans from international financial institutions but wants to protect economy. The affluent class must show generosity and think selflessly and sincerely. . There is no tradition in this country to pay taxes by the elite. however it would be transformed through reformed GST. it was easier for economic managers to include substantive features of VAT to make reformed GST broad-based. Politically. enabling the government to start raising tax revenues required for a sustainable growth. Pakistan. The ministry of finance is to re-evaluate the macroeconomic framework once the damage / needs assessment is completed. reduce exemptions and input crediting. and the lobby which has benefited from exemptions is opposing restoration of GST to its original form. he said. he said. The government has already increased the budget by eight per cent. Dr Shaikh said. Country s financial situation was not good before floods. and there is no cut in the budget of public sector universities.

We have an ongoing lending program to the GoP in both of these areas. There are other actions we are supporting with this credit. which will go forward if the agreed actions are completed. the official explained. The key to moving to higher growth now are Pakistan s macroeconomic policies to bring about lower budget deficits. There is very little impact on the budget from the delay of the VAT/reformed GST from July 1 to October 1. he said. At the same time. Secondly. The major concern of the World Bank at the moment is helping the government get the economy moving again and achieve higher growth rates on a sustained basis. that would achieve these objectives. The World Bank has been in discussions with the government of Pakistan and FBR for more than a decade on reform of tax administration and tax policies. increase employment. A reformed GST. Broadening the base. the government will fully honor its commitment to scholarships.Though there is a freeze on current expenditures. World Bank strongly supports reformed GST The World Bank (WB) has strongly supported introduction of reformed general sales tax (GST) as it would contain all features of the value added tax (VAT). improve education and health outcomes. Support of RGST Pakistan Peoples Party Pakistan people s party strongly in support of RGST as it is purposed by their would reduce the poverty headcount. and all those studying abroad on scholarships would be allowed to complete their studies. all projects completed by 80 to 90 per cent would be allowed to be completed. the more equitable that growth seems to be. especially in rural areas and among rural women. A World Bank official told Business Recorder here on Wednesday that at present the major concern of the World Bank is supporting the government to get the economy moving again to achieve higher growth rates on sustained basis. is a long standing agenda item in our dialogue and is one of the actions we are supporting with our Poverty Reduction Strategy Credit. The longer high growth rates persist. which will allow lower . It will reduce the inflation affect on the people and people will give 15% tax on all items instead of paying multiple tax variables. and their finance minister Hafiz Sheikh said it will increase the tax revenue and also help in prosperity of the country. which is a value-added tax of the same nature as the proposed VAT. removing exemptions and increasing compliance have been at the heart of these efforts. all of the features of VAT are to be included in the reformed GST. High growth is clearly pro-poor in Pakistan in many ways . as the revenue impact of the three-month delay has been made up from increases in other taxes indicated in the budget speech of the Finance Minister.

but will definitely block programme lending and budget financing. A worrisome aspect is that it will undermine post floods rehabilitation and reconstruction efforts . He refused to speak on record due to the political sensitivity of the issue . the official added.interest rates. He said that the finance ministry had clearly told Prime Minister Yousuf Raza Gilani on Tuesday that if the government did not implement the reformed GST.3 billion bailout programme will lapse on the same date. . Background interviews with multilateral donors reveal that in a worst-case scenario. December 31 is the third deadline given by the International Monetary Fund for implementing RGST: a two-year $11. Recent political developments like the JUI-F pulling out of the ruling coalition and MQM s stiff opposition to the law have made the task even more difficult for PPP government to pass this legislation. Opposes of RGST The ruling PPP is facing stiff resistance from mainstream opposition parties like the PML-N and PML-Q. The IMF has suspended the programme since May this year with two tranches of $3. The GST is not all about collecting Rs40 billion taxes this year but a declaration of intent of what we are going to do to tap our resources. which will not only increase government debt financing cost but will also break the backbone of the industry. donors will hold review meetings in mid-January and try to work out joint strategies to deal with Islamabad. they say. said a top finance ministry official on condition of anonymity.6 billion remaining undisbursed. which will be a double edged sword. more credit for the private sector. He added that the State Bank will have to increase the main discount rate to control inflation. So far. Pakistan again promised to implement the programme by October 1 and then again from January 1 next year. the government has succeeded in securing the approval of the Senate on the bill with the help of PML-Q and the legislation was sent to the national assembly s standing committee for approval before moving it for a final vote. They say the donors may not stop funding for ongoing result-oriented projects. faster growth of the formal sector industries and higher exports. He said the most worrisome aspect was that the government will borrow the same amount from the domestic market. The most crucial condition of the IMF was to implement the so-called reformed GST by June 2010. it would result into a widening the budget deficit. the government messed up the committee proceedings and did not seek voting on the draft law which was necessary before sending the bill in the National Assembly for final approval. while their own allies MQM and JUI-F have publicly announced intentions to vote against the bill. In the lower house of parliament.

However. The agricultural sector. an amount of Rs 400 billion being wasted on various state corporations should be saved. The chairman readymade garments Ijaz Khokhar in his speech said RGST imposition is being done to win the favors of IMF so that next installment of loan can be had. exporters disapprove RGST Industrialists and exporters disapprove RGST. we therefore demand from the government that is should ink all financial policies by taking the industrial sector into confidence after considering the pros and cons of the goods and bad of it. said the RGST was an international conspiracy to destroy Pakistan s agriculture and industry. or its rate should be brought down. He warned that in case the government imposed the tax it would create a turmoil which no government would be able to control.3 per cent at present. surgical good and host of other types of industries was held on Tuesday under the chairmanship of SCCI President Ch. Punjab PPP Secretary General Samiullah Khan said some people were opposing the RGST for their vested interests. he said. The situation would improve remarkably if the government removed the flaws in the recovery system. He urged the Punjab chief minister to oppose the new tax to save the people of his province. Mughal recalled that tax-to-GDP ratio stood at 14 per cent in 1980-81. Punjab alone being the biggest province would have to contribute up to Rs 100 billion. A joint session of leather goods. In his opinion it would be better for the government to go for direct taxation to recover more money from the elite. he opined that if the policy makers do so Pakistan shall not have to beg for foreign financial aids and loans. Agri-Forum. Similarly. Another Rs 1. Otherwise. Industrialists. Chairman. Ibrahim Mughal. head of the Agri-Forum and an economist on Thursday pointed out flaws in the Reformed General Sales Tax Bill and suggested alternatives to increase tax collection without adding to the difficulties of the common man. and insisted that the new taxation measure would help improve the economy. he said. but it went down in the subsequent years to 9. He said if RGST is imposed it will prove ruinous for the country as exports will be cut to minimum. He said if the RGST was imposed and the target was set at Rs 120 billion. he said. he further said that the Sialkot Exporters have practically exhibited it under the city package by demonstrating so in the mega project. He went to the extent that the industrialists will not allow the Government lavish spending with the .Experts divided over imposition of RGST The acting president of the Lahore Chamber of Commerce and Industry. He said the RGST should not be imposed at all. the agriculture sector would be hit to an extent that the country would have to import even rice and wheat. Ghulam Mustafa. he said.000 billion could be brought to the exchequer by plugging corruption in departments. would be badly hit. sports goods. hosiery. All four expressed their points of view at Aiwan-i-Waqt.

He said that it may burden the existing tax payers too. which covers both goods and services. but over all. if RGST is not abandoned then we will close down the industries totally and hand over the keys to the Government and ask her to provide us jobs thereof. billions of refund cases are decorating the files of the Government pending disposal. 667 billion for the current fiscal. 2010 (Balochistan Times): Former President Rawalpindi Chamber of Commerce and Industry Syed Asad Mashhadi has said the Reformed General Sales Tax (RGST) will have a positive effect on the economy. it added. Speaking to Radio Pakistan. Ex-President RCCI says RGST will have positive effect on economy ISLAMABAD. It also underscored the need of extensive cross-checking of information. November 27. He said that nobody is unwilling to pay tax. The federal minister. He said that the government should have consulted the chambers of commerce and industries to facilitate the implementation of the RGST.foreign exchange earned with their sweat and blood. Reformed GST would not add to inflation: Hafeez Sheikh Federal finance minister Abdul Hafeez Sheikh has confessed that there are some serious discrepancies in the taxation system of the country while he also said that the implementation of the reformed GST would not add to the already prevailing wave of inflation. should be brought into it. Asad Mashhadi said every Pakistani wants that the government should have enough revenue to rehabilitate the flood victims. 340 billion in financial year 2010 and the government has set an ambitious target of Rs1. He added that those who are out of the tax net. This will be essential for the successful implementation of a broadbased VAT or reformed GST. The World Bank said that TARP had been hitting snags since 2007 due to implementation issues. the FBR proposes to increase the number of Regional Tax Offices from 12 to 13 and Model Customs Collectorates from 6 to 9. which would provide a strong justification for the proposed restructuring. Effect of reformed GST The latest decision to extend the program came in response to Pakistan s renewed commitment to implement key revenue administration reforms. The World Bank stressed that FBR should enhance project performance by improving integrated management system to monitor taxpayer compliance and electronic filing of returns. Pakistan s revenue collection stood at around Rs1. Tax experts said that the reform program could not yield results as the country failed to tap the real potential of revenue collection. Some policy issues also weakened its potential impact. during a meeting of the standing committee of finance. He said further lowering of the tax rate would bring more positive effects. he said that only the equal and uniform implementation will help improve the tax base to meet the revenue requirements of the government. In order to extend operational network and achieve a more balanced work load. said that a wrong conception is being projected and professed amongst the masses as if the government is implementing . the RGST would have positive effects on economy. how can we wait and see and rely on the false promises of the Government in 2005 RGST could not be imposed for the plan leaked. The WB has given commitment to support all efforts to boost compliance and revenue collection.

The federal minister added that everyone has his own view of the taxes just to fulfill his own vested interests. He said that instead of expanding the tax net and implementing taxes on the real estate business. the manufacturer will add another 15 per cent to the value addition of Rs20 which will bring up the cost to Rs138. the entire burden is being shifted to the shoulders of poor masses. he would charge Rs115 instead of Rs100. Not just that. the manufacturer. . The product now costs Rs135. The retailer will then pay the added tax back to the treasury. i. For example if a supplier sells raw material worth Rs100 to a manufacturer. Since everyone will be documenting and paying the tax at each level. Instead of selling it at Rs158. a certain amount of tax will be added at each stage of production. After manufacturing the product. Assuming that is another Rs20. any attempt at tax evasion will automatically be highlighted.some new taxes whereas the case is the other way round and the government just wants to reform the taxes already present. a tax on goods and services. for example. How will it impact you? The new tax does have a wider reach than the old GST. RGST is an indirect tax. According to economic experts. tax evasion will become more and more difficult. He also termed the GST Bill 2010 as illegal. the price of the product is now up to Rs158 again. the RGST will not be imposed just on the final price of a product. and remit the extra Rs15 as tax. Which means it`s bad for the poor and the less well-off. but instead of selling it to the retailer at Rs135. this system of taxation will help bring more people into the tax net. He further said that the flood tax is a new tax and the masses would be briefed about its nature and reason of implementation. Senator Professor Khurshid Ahmed said that many points of the bill need to be reviewed and that the legislation of the bill should not be done in an unnecessarily hasty manner. rather. Unlike the old GST. adds a profit of Rs2o. The reformed general sales tax (RGST) is bad for consumers. The extra Rs3 will be remitted as tax. The reason is pretty straightforward. which includes the poor and the less well-off. the retailer will add yet another 15 per cent of the value addition and the final cost will be Rs161. There are exemptions and conditions. but so far the glitches are being worked out.e. Finally. When the RGST is imposed. everyone from the suppliers to the middleman in small and large businesses will be brought within the tax net. Which means it will get passed on to the end consumer. Dr. the retailer will add his profit. Earlier Senator Haroon Akhter said during the meeting that there are several ways to increase revenue. Sheikh also said that the previous governments could not increase the rate of taxes proportionately with the national income.

and masses are more than sure that there hard earned money will go to Swiss or French banks. there is a very different kind of problem which has ravaged the poor in recent years: inflation. the Sierra Leone is the country where the lowest numbers of people pay tax. In part. Then comes our shining Pakistan. would balloon again further driving up inflation. The existing tax net is the one who will pay more. the fiscal deficit the country has been running has helped keep inflation high.  The government has tabled the Reformed GST (RGST) bill in parliament along with some additional taxation measures including the one-time flood tax. Now. This tax which will be promulgated soon will bring a new wave of price hike and initiate a new round of poverty in the country. where people evade the tax. . the government wants to harp on the positive aspects. which is already has grown economically bankrupt.  The fact is that Pakistan has made a commitment with the IMF to implement this tax for the debt servicing the IMF debt. But. `Stationery items. Our view Biggest Objection on Reformed GST  Among the cluster of some 172 countries. But look at all the stuff that is getting taxed. That loan will help maintaining the luxurious lifestyle of our elite. But before blaming the general public for this malaise. Taxation is the primary source of income for any country.  The problem with this new GST is that instead of widening the tax net. are unlikely to hurt the poor because they don`t use carpets or leather goods. and here`s the rub. with the floods having added colossal expenditures to the overall budget. we need to find out what exactly is the reason people abhor paying the taxes. for obvious reasons: new taxes on leather goods and carpets. `Surgical items` which means your next trip to a doctor may cost more. for example. dairy products` self-explanatory. All those crocodiles and snakes will once again have a tax holiday. And where would this tax is spent? Nobody trusts this government. in the absence of revenue-generating measures. the fiscal deficit. 14 Corer people are earning only $2 a day.Yes. And for that we need go no further than the information ministry`s six-page handout on RGST. It will provide a fine platform for the government to get more loans from the IMF and other lenders. `Pharmaceuticals (other than life saving)` which means the next time you have a mild illness you`ll pay more to get better. the government has once again put more burdens on the people who are already paying the taxes.

Miscellaneous Exempt Items .


Fraud and Misconducts .