RGST

What sealed the fate of the RGST Bill was the nature of political opposition, reflecting of course various business interests.

This simply means that the economic mangers of the government, who held talks with an IMF team in Dubai and briefed them on the salient features of the next budget, have tried to fool the masses, urban-based political players and business tycoons by leaking the false information that the RGST had been shelved, The News reports.

Critics say that RGST would have an inflationary impact and prices of consumer items would go up due to withdrawal of exemptions under the RGST regime.

He said that before taking decision on imposition of RGST, the government did not consult the stakeholders as such consultations were imperative.

Having given you our position that we support RGST implementation let me share with you some of the concerns that we have.

Islamabad Chief of main opposition Pakistan Muslim League-N (PML-N) Nawaz Sharif reiterated yesterday his party would not support a move to levy a reformed general sales tax (RGST), which the government says is vital for expanding the tax net to boost revenues and shore up the sagging economy.

Reformed General Sales Tax (RGST) if approved by the Parliament would not result into hiking inflationary pressures because the multiple tax Rates ranging from 17 to 15 percent, they added.

"Yes, the International Monetary Fund has agreed with Pakistan to not introduce the Reformed General Sales Tax, and now we will adopt Plan-B in which all tax exemptions will be eliminated in the annual budget 2011-2012, and this plan is more feasible than the RGST," The Nation quoted a Pakistan Finance Ministry official, as saying.

International Monetary Fund (IMF) has linked the visit of a full-fledged mission with concrete steps on RGST and other revenue mobilization measures.

Zubair Motiwala, Chairman of the Council of All Pakistan Textile Associations said that textile sector account for more than 58% of the country's exports, and under the RGST small exporters will disappear from the scene.

In order to understand the possible challenges and opportunities that could be encountered while implementing RGST let us go back in history and remind ourselves that the transition from sales tax (ST) to GST in early 1990s was not smooth and trouble-free and we should not expect anything different when progressing from GST to RGST.

The RGST is a consumption-based tax, levied on any value that is added to a product.