Dissent against proposed tax ‘reforms’ resounds throughout Punjab


LAHORE: The business community and traders of the provincial capital has spurned the reformed General Sales Tax (GST) and 10 percent Flood Surcharge. Criticism of the new tax regime has mounted as business leaders claim that the government is putting additional burden on the existing taxpayers instead of widening the tax net.
Speaking to the Pakistan Today, SAARC Chamber of Commerce and Industry Vice President Iftikhar Ali Malik said that imposition of the reformed GST and a 10 percent Flood Surcharge would further aggravate the problems faced by the industrial sector. He urged the government to reconsider its decision as it was bound to hamper commerce and industry but also the government in the long run.
He stressed that the introduction of the reformed GST would prove to be counterproductive, only causing massive price hike and without discernable benefit. It would decrease the purchasing power, which would ultimately affect the government tax collections.
Malik said reducing the GST rate from 17 percent to 15 percent was a positive sign but the government had simultaneously withdrawn all exemptions rendering it useless. The Value Added Tax (VAT) is being put forward in the new guise of the reformed GST. He reiterated that business community would never accept the imposition of VAT in the guise of the reformed GST.
He said that exemptions and zero rating facilities would be withdrawn under the reformed GST and have a direct effect on the manufacturing costs of domestic industry. The cost of industrial inputs and raw materials would rise exponentially on the withdrawal of exemptions.
Lahore Chamber of Commerce and Industry (LCCI) office bearers have also taken the government to task over the approval of the reformed GST and Flood Surcharge. LCCI President Shahzad Ali Malik said that the proposed reformed GST would further swell the inflation rate in the country. He denounced the new taxation.
It was unfortunate, he stated, that the new taxation measures had been approved without giving due consideration to the grim scenario face by industry. Shahzad Ali Malik said that the new taxation measures would ramp up the prices of essential commodities. “Instead of bringing the untaxed sectors into tax net, the government had taken the other way of squeezing those who were already in the tax net and paying all government dues regularly,” he lamented.
He urged the government to postpone taxation measures till the economy attained some semblance of recovery. He also drew attention to the unhealthy influence of the International Monetary Fund (IMF). Pakistan Industrial and Traders Associations Front (PIAF) Acting Chairman Khawaja Shahzeb Akram denounced the implementation of reformed GST. He was likeminded in condemnation of the IMF.
The business community would not allow the government to impose IMF and World Bank dictates without consent of the people, he forcefully asserted. He lamented that the government was making light of the plight of business community and common man. The exemption on food items was for non-patent and open food items not for packed products, a move seemingly designed to place pressure on the common man.
He urged the government that if it really wanted to increase its revenues it should impose tax on agriculture income, which would bring huge money to the kitty. He said imposition of 15 percent reformed GST would create multiple problems as the economy was not yet documented.
All Pakistan Anjuman Tajiran General Secretary Abdul Razzaq Babbar questioned whether the reformed GST was in line with the government’s pledge to expand the tax net to those who own luxury cars and mansions. He said the Federal Board of Revenue (FBR) was implementing the IMF policies, but traders all across Pakistan would reject this decision.
He said that traders did not want to confront with the state but the government was pushing them to the wall. He stated that the government had decided to impose 10 percent Flood Surcharge on the already registered taxpayers who have 300,000 or above income, placing the brunt on an already overtaxed segment of the population.
Kisan Board Pakistan Central President Sardar Zafar Hussein strongly reacting to enforcement of reformed GST called upon cultivators to prepare for a bitter struggle against the new tax. He wrote an open letter to growers in which he termed the new taxation a remorseless decision on the part of the federal government and destined to bring a new wave of inflation.
He said that it would result in massive pressure on the prices of all agricultural inputs, including fertilisers, seeds, oil and pesticides. It was claimed that the step would be the last blow to the already hard pressed agricultural sector. He said that on one hand, rice, flour, cotton and sugarcane millers were causing massive losses to the agricultural sector as they deferred payments to growers and on the other hand government had levied reformed GST.
He said the government had to review its decision; otherwise growers would be compelled to take direct action against the cruel decision taken by the government. Business leaders, industrialist, traders and farmers urged the PM to reconsider the implementation of the reformed GST and Flood Surcharge and help the country overcome the economic crisis.