Karachi Income Tax Bar Association (KITBA) on Monday termed the implementation of Reformed GST at proposed uniform rate of 15 percent as impracticable and unaffordable, saying that it would convert the poor into barbarians. This was stated by Ali A Rahim, president of KITBA at a seminar on "The General Sales Tax Bill, 2010, which was organised by Pakistan Tax Bar Association in collaboration with KITBA, held at Karachi Regional Tax Office (RTO) here.
He said the implementation of RGST at the proposed uniform rate of 15 percent was not realistic, which would not only increase the inflation further but also force poor to become ruthless against rich. He suggested the Federal Board of Revenue (FBR) to reduce the proposed uniform rate of RGST from 15 percent to 5 percent to make its implementation viable. Moreover, he said the withdrawal of zero rated exemptions in RGST regime would escalate the cost of doing business, which would cause to shrink the country's export.
Ali further urged the revenue body not to withdraw zero rated exemptions before flushing out all pending refunds, saying that the withdrawal of zero rated exemptions may create chaotic situation in the tax departments, if all pending refunds, which is now reached to Rs 200 billion, were not disposed of.
In his keynote address, Khuwaja Tanveer, Commissioner Audit of Karachi RTO, said the FBR is expecting to generate Rs 35 billion to Rs 40 billion through RGST in six months and hoped that the RGST would increase the tax-to-GDP ratio from 9.1 percent to 14 percent in coming five years.
He said that the FBR is presently moving towards computerisation, which would not only help in clearing refunds' backlog but also eradicate corrupt element from the department. Earlier, Adnan Mufti, partner of Shekha and Mufti Charter Accountants highlighted pros and cons of the General Sales Tax Bill 2010 through presentation. A large number of bar members, trainee officers and businessmen were present on the occasion.
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