ISLAMABAD - Succumbing to the pressure of strong sugar mafia, government has once again decided not to increase General Sales Tax (GST) on sugar to 16 per cent from existing 8.5 per cent in the budget, as concession given to specific sector is costing Rs 10 to Rs 12 billion to national kitty annually in terms of revenue collection, it has learnt on Monday.
Sources informed The Nation that government has earlier decided to increase GST from eight to 16 per cent in the budget 2012-13 on sugar, however later the proposal was dropped apparently due to the pressure of strong sugar mafia of the country. The specific sector of sugar is enjoying tax relief from last three years, as government in 2009 decreased GST on sugar when commodity prices had gone beyond Rs 100 per kg level in the country. The commodity price is still higher (above Rs 60 per kg) in the country despite enjoying 50 per cent GST concession from last three years indicating that common people are not being facilitating from this concession. 
Sources informed The Nation that the Federal Board of Revenue (FBR) is facing loss of Rs 10 Rs 12 billion annually in terms of revenue collection due to reduction of GST on the commodity. The government has set an ambitious revenue collection target of Rs 2,381 billion for the next fiscal year 2012-13, which is 22 per cent higher than the collection target of Rs 1,952 billion of the outgoing financial year 2011-12.
It might be mentioned here that government would generate Rs 63 billion with new taxation measures in the next fiscal year. On the other hand, the government has announced several taxation relief measures for the masses, which would cost Rs 31.22 billion to the national kitty in terms of revenue collection, in the upcoming fiscal year 2012-13.