Apropos 'POL products: Prices slashed but GST rate raised' carried by Business Recorder yesterday, how ironic it is that the government has raised the rate of General Sales Tax on petroleum products from existing 22 percent to 27 percent.
According to media reports, the government has taken this decision due to huge losses it is incurring under the head of sales tax. The government intends to meet the annual target of Rs 2,800 billion; therefore, it has to increase the sales tax rate on various products as the government is facing a shortfall of Rs 70 billion due to a cut in prices of petroleum products.
It is a highly implausible argument. The FBR is required to plug loopholes in the tax machinery by broadening or widening the tax net. It must begin to tax the rich as well without any further loss of time. The government, therefore, must withdraw the latest hike in the GST rate on petroleum products.