ISLAMABAD: The federal government will not let the provincial governments off the hook if they attempt to politicise the Reformed General Sales Tax Bill in the provincial assemblies, a senior Finance Ministry official said on Saturday.
The official, on condition of anonymity, said the introduction of the reformed GST on goods and services was approved at the meeting of the Council of Common Interests (CCI). The chief ministers had attended the meeting and president of the main opposition party, the PML-N, and the Punjab chief minister endorsed the bill.
“We knew that some of the political parties may try to play foul by politicising the issue so we got it signed from the provincial finance secretaries. Now they can play to the galleries but have to approve it.” He said the federal government had proposed taxation on agriculture by imposing the reformed GST on seeds, fertilizers and machinery, adding that taxing agriculture income lies under provincial domain.
The bill’s approval by the provinces assemblies would establish which party – the ANP, the PML-N, the MQM or the PPP – was pro-people. “This acid test will be catastrophic for the political parties as their much vaunted principled stand will bare before all.” He said as reformed GST would be chargeable on the value-added component of each stage of the supply chain, it would help documentation and block revenue leakages.
“The RGST would be a tsunami for the well-off manufacturers, marketers, distributors, wholesalers and retailers as the reformed system relies on the parties reporting the exact same data on the size of the transaction.” The bill would tax the pampered sectors of textiles, leather, sports goods, surgical items and carpets. Similarly the defense stores, stationery, dairy products and pharmaceuticals would be taxed.
