The Vice President, SAARC Chamber of Commerce and Industry and FPCCI former President Iftikhar Ali Malik has urged the parliamentarians to review the implementation of Reformed General Sales Tax (RGST) and flood surcharges as it is bound to create complications not only for the government but also for the masses as well.
Malik in a statement on Thursday said the government decision to impose reformed general sales tax (RGST) and 10 percent flood surcharge would further aggravate the miseries of the industrial sector that was already facing multiple problems. He said that RGST and flood surcharge would decrease the purchasing power of common man and cause decline in the industrial activities thus hitting the government revenues.
He said that even if the rate was reduced from 17 to 15 percent, imposition of RGST would withdraw all exemptions having huge inflationary impact on consumers. He said that the Value Added tax (VAT) has been renamed as RGST by including all ingredients of the VAT. The business community was shocked over the government methodology to impose VAT in the name of RGST by withdrawing all kinds of exemptions. He said VAT had been proposed to be implemented under the cover of RGST, which was unacceptable to the business community.
Malik said that exemptions and zero rating facilities would be withdrawn under the RSGT having direct impact on the manufacturing cost of the local industry. At the same time, he said the input and raw material consumed in the finished products would also be increased due to withdrawal of exemptions and high cost of utilities.
While showing concern on electronic refund, he said that the issue of sales tax refund was pending for many years and business community was moving from pillar to post to get these refunds. He said that before imposition of RGST, they have to make complete documentation to move to electronic tax system but it will take years.
He said the new electronic refund system was in test phase and it is yet not clear whether the tax authorities would be able to countrywide replicate the new system of the withdrawal of zero rating facility. Malik also appealed to the Prime Minister Syed Yousaf Raza Gillani to withdraw the decision of RGST and flood surcharge implementation in the larger interest of the industry that was already hanging on the edge of destruction.