The major opposition parties wanted to link the approval of recommendations on Reformed GST with commitment from the government to reduce expenditure, eliminate corruption from public sector institutions, taxing agriculture, and real estate and plugging all the leakage in revenue collection.
Senator Ishaq Dar of PML-N and Haroon Akhtar of PML-Q said that if RGST is a compulsion by the International Monetary Fund, it could be an isolated step for revenue generation but macroeconomic stability could not be achieved without taking in tandem RGST and other reforms including preventive steps vital for keeping the wheel of the economy moving. Ishaq Dar underlined the need for revival of wealth tax saying that it would contribute equal to the collection expected by RGST. Wealth tax, he said, is the only way to tax the assets of affluent feudal class that was not paying agriculture tax.
Without 8 percent GDP growth, he said no government would be able to provide employment to the increasing population of the country. Dar also reminded the chair of his ruling during the budget session that Finance Minister Dr Abdul Hafeez Sheikh would sit with the opposition to work out modalities for imposition of wealth tax.
He said that it was unfair by the previous government to abolish wealth tax in 2002 because it was giving revenue in double digit even in 1999. Former Finance Minister said the government needs to tap all the resources of revenue generation and so should the provinces by taxing agriculture income that has become their domain after the approval of 18th Constitutional Amendment.
Pakistan Muslim League (Q) Senator Haroon Akhtar said that the Senate Standing Committee on Finance would be looking forward from Finance Minister Abdul Hafeez Sheikh to sit with the committee and have a detailed exercise, as committed by him two days ago, for each and every public sector institution to identify the areas to reduce government expenditure. We have accepted the challenge of the Finance Minister that the committee members would identity the areas where the government can cut expenditure, he added.
Haroon said Senate should approve the recommendations but with the precondition that government would reduce its expenditure and tap all other available resources. Haroon Akhtar said that there is justification for the government, particularly after the floods, to bring the informal sector into the tax net and make people pay taxes who have been earning huge income through crops such as maize, cane, cotton and wheat.