GST increase not to be withdrawn: Dar

The current economic situation doesn't allow for reversal of GST rate, says finance minister.


Umar Nangiana June 22, 2013
The current economic situation doesn't allow for reversal of GST rate, says finance minister. PHOTO: AFP

ISLAMABAD: The government has decided not to withdraw the proposed one per cent increase in general sales tax (GST) for fiscal year 2013-14.

Finance Minister Ishaq Dar, winding up the budget debate in the National Assembly on Saturday, said that he had carefully reviewed the opposition's recommendations on the increase in GST but the country's economic condition currently did not leave room for withdrawal of the increase.

Dar said that there was a Rs374 billion revenue shortfall in Federal Board of Revenue (FBR) collections during the past fiscal year. This year begins with the biggest budget deficit.

"Other countries apply 17 % GST rates, just like us," said Dar.

However, the finance minister assured the house that the government will withdraw the one per cent increase if the resource situation allowed for it.

The finance minister told the house that minimum wages for labour had been increased from Rs8,000 to Rs10,000.

According to Dar, the government incorporated 21 recommendation proposals from Senate into the finance bill this year. This has been a first in Pakistan’s history, he claimed.

COMMENTS (27)

Jabir Tari | 9 years ago | Reply

FM, please don't tell a lie, it is from 0% to 17% in different countries but not on basic necessities of life like clothes and medicine.we should be realistic not cruel.

shoukat tareen | 9 years ago | Reply

there are two problems in Pakistan with taxes. 1) 70% Pakistanis do not pay their taxes and those who pay them are paying nominal part of the due taxes , by using unfair means, except the salaried class, who might have also not payed if it was not deducted from their pays. 2) The taxes payed by the people are not used properly, basic sevices are not provided, corruption is the order of the day everywhere, in short the govt is not peforming its duties for which citizens pay taxes. In turn people do not pay their taxes because they think that their money is not used for them. Therefore, if the govt is sincere it should take two steps. one instead of raising taxes on thse honest citizens who already pay their taxes concrete steps should be taken against the non-payers to increase the tax revenue and second, governance should be made good so that tax money is used properly and all basic services are being provided to the citizens. It will instal the trust of the citizens and they would willingly pay their taxes.

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