Over 170 countries are paying Regressive General Sales Tax (RGST) but at the same time have introduced measures for proper checks and balances and have documented the economy, which unfortunately is not the case in Pakistan. Chairman, Travel Agents Association of Pakistan (TAAP), in a statement to the press issued here on Friday said that repercussions of the application of RGST in Pakistan would be much more harmful for all walks of life, particularly those living below the poverty line.
There is no difference between an individual earning Rs 2,000,000/- per month and the one who is earning Rs 7,000/- per month as both are being treated with the same yardstick, he said. Unfortunately, he said there is no concept of gains tax in Pakistan which should have been implemented much earlier. Tax on agriculture and GDP share is only one percent. Similarly on service sector the tax ratio is 53% and the share in GDP is 26%. On real estate, ie buying and selling there is no viable tax. There is desperate need to document economy and government should refrain from manipulation/embezzlement from taxation system, he said.
Polani strongly supported the statement of Chairman, Federal Board of Revenue that had tax embezzlement been stopped, there would have been no need to enforce RGST. He also slammed GST as a regressive tax. He said that government should formulate a policy to impose tax on every kind of income, which is more than Rs 300,000 a year. If this is done, the importance of RGST could be postponed for an indefinite period, regardless of receiving surcharge on petroleum products. He proposed that nation would definitely welcome the efforts of government, if it decides to apply GST @ 7.5 percent from the fiscal year 2010.
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