MABAD - Seeking support on much controversial and much debated Reformed General Sales Tax (RGST), the government has decided to approach all parliamentary parties to convince them to make RGST a part of financial bill 2011, The Nation has learnt.
We have decided to start negotiations with all the parliamentary parties in order to convince them to make RGST a part of finance bill 2011 and get it passed in the coming budget, a top official of Gilanis government told The Nation the other day. He further said that apart from coalition partners, the government would also try to take opposition on board in this regard.
He was of the view that the govt might table new General Sales Tax bill in the parliament, as most part of the bill that is already tabled in the parliament has been covered through withdrawing tax exemptions and zero-rated facility to several sectors through SROs.
It is worth mentioning here that the government had to introduce Reformed General Sales Tax in the outset of ongoing financial year as agreed with the IMF, however, it remained failed due to the strong resistance inside and outside the parliament. Therefore, the IMF refused to release remaining two tranches of the standby loan programme worth $ 3.4 billion.
The IMF would release one of the remaining tranches of the programme if the government successfully introduce RGST in the next fiscal year, sources in finance ministry told. He further said that the government has planned to increase its tax net in the coming fiscal year, and introduction of RGST would be one of the components in this regard.
The RGST would not only document the whole economy but it would also bring service sector in the tax net. Similarly, under the RGST, the standard rate of General Sales Tax (GST) would be reduced to 15 per cent from existing 17 per cent, as it already stated by Federal Minister for Finance and Economic Affairs Dr Abdul Hafeez Shaikh in a media talk other day.