The International Monetary Fund (IMF) wants the Federal Board of Revenue (FBR) to increase the country’s tax collection by Rs. 1.3 trillion by charging an 18 percent GST on goods including unprocessed food, stationery items, medicines, and petroleum products.
However, the IMF has not evaluated the potential impact on inflation if such a significant increase in GST is implemented through indirect taxation, reported a national daily.
The IMF wants Pakistan to cancel certain schedules and exemptions related to GST, including removal of the Fifth Schedule and restricting exemptions under the Sixth Schedule to only residential property transactions. IMF wants all goods to be charged a standard GST rate, except for essential items like food staples, education, and health goods which could be taxed at 10 percent.
The lender wants reduced rates under the Eighth Schedule canceled. It wants the government to end compliance-related tax policies such as minimum taxes and surcharges.
The IMF has advised removing zero ratings under the Fifth Schedule which would affect items exclusive to diplomats, diplomatic missions, and certain organizations, among others. Similarly, they propose restricting exemptions under the Sixth Schedule to specific items, including imported vegetables, pulses, and certain medical equipment.
Other recommendations also target the Eighth Schedule, suggesting changes to items such as natural gas, phosphoric acid, and fertilizers.
In short, the IMF’s proposals aim to streamline GST rates to increase revenue while minimizing distortions in the tax system. The underlined changes could have significant implications for various sectors and consumer prices.
Pakistan need to double taxes on each and every thing people will keep on saying decrease price but government needs to increase tax price to at least 35% otherwise raising such money will not be possible.
Whatever the requirement of IMF current and near future , can be taken into account but Government should not forget to do the tax reforms particularly to increase the tax base as majority are still
Out of it in addition to it to start sales tax at POL ( zero at this point of time on Diesel and MS ) there is immense need to regulate Irani smuggles Diesel and petrol at least while putting PDL on it and also due to non sales tax and loose control on Borders resulted in increase smuggled product magnitude like white spirit, Solvents , other hydrocarbon bae products etc & these product original requirement or usage is not more than 20% but at bulk now these are being mixed with Diesel and Ron92-97 across Pakistan so serious actions and reforms required in energy sector for product management from supply source to sales , but authorities like OGRA and department like Custom can’t do it alone each and ever stakeholder including Baloch tribes and Pakistan armed forces must support it as this is major bleeding in Country revenue and now it is spread like cancer if you do not treat cancer , result you all know better ! Too much written at all forums on smuggling this is the time to do concrete actions 🙏🏿🙏🏿✅