In what appears to be a move aimed at avoiding pressure from influential businessmen and land lords, the government has decided in principle to the impose general sales tax on more commodities in the next budget.
The understanding on these lines has been reached after marathon meetings held by the government’s economic teams headed by Finance Minister Dr Hafeez Shaikh, Planning Commission Deputy Chairman Dr Nadeem ul Haq, Finance Secretary Dr Waqar Masood and Revenue Advisory Council Chairman Dr Hafeez Pasha.
A majority of the team members have agreed to extend GST to new products, but they are divided over reintroduction of the wealth tax, bringing exporters into the tax net and increasing the rate of income tax on real estate owners, as they fear a political backlash.
Tax officials were tasked to evaluate revenue impact of raising GST rates for some products and to extend it to new products in the budget.Increasing the GST rate on domestic sale of textile products, carpets, and sports, surgical and leather goods is under consideration.
