After submitting request to the IMF for an extension, Prime Minister Syed Yousuf Raza Gilani has convened a crucial meeting here on December 23 (today) to find some solution to controversy over Reformed General Sales Tax (RGST).
All the four chief ministers, finance minister Dr Abdul Hafeez Shaikh, key members of the federal cabinet including Syed Naveed Qamar, Wiqar Ahmed Khan, Hina Rabbani Khar, Mir Hazar Khan Bijarani, Makhdoom Amin Faheem and concerned federal and provincial officials have been asked to ensure their participation in the meeting.
Finance Minister Dr Abdul Hafeez Shaikh will give a briefing to the meeting on RGST imposition, its benefits to Pakistan's economy and possible outfalls in case the plan does not go through due to parliamentary and non-parliamentary opposition. The meeting will also be informed that non-compliance of the IMF conditionalities linked for release of its two instalments of $3.4 billion of $11.3 billion standby arrangement will not only mean erosion of Pakistan's credibility in the global world, but would also affect release of tranches of Kerry Lugar package and other inflows from international donors inviting disastrous result in the future.
As resistance on RGST is increasing, the government on Wednesday night decided to hold a crucial meeting with the provinces and other key departments to take them into confidence and to formulate a policy so that the bill to approve RGST may get a nod from the Standing Committee of the Parliament headed by Fouzia Wahab and subsequently from the parliament.
The government is facing tough resistance on RGST issue and at the same time it is under huge pressure from the IMF and other international donors to put this reformed taxation system in place or face isolation from the world community which is already giving tough time to the government of Pakistan on various counts.
Dr Hafeez Sheikh is said to have conveyed at the highest level that non-implementation of RGST will turn difficult for him and his team to carry on their work for the government in present capacities. It is pertinent to mention that advisor to Finance Ministry Saqib Sherani has already submitted his resignation to the Prime Minister after feeling discomfort with the policymakers on key issues such as RGST and fiscal deficit target. In this scenario Thursday's meeting is being seen as a make or break phase on RGST issue.