Pakistan

RGST plan finds no takers

Friends and foes alike vow to block legislation, ignoring PM’s sweet talk in NA, calling the tax 'anti-people'.

Zia Khan November 12, 2010

ISLAMABAD: A promise by the government to evolve a national consensus on proposed taxation reforms appears to have gone unheard as its allies and opponents vowed to put their strength together to block the legislation, calling it anti-people.

Hours after Prime Minister Yousaf Raza Gilani said he would reach out to coalition partners and opposition parties to win their support for the Reformed General Sales Tax (RGST), political groups rejected the move with threats to obstruct it.

“We will take everybody into confidence on the GST reforms bill,” Gilani told media here on Thursday as the government prepares to move the draft legislation in the National Assembly on Friday.

Members of the federal cabinet on Wednesday approved new taxation measures of around Rs70 billion through reforming an outdated sales tax regime, increasing regulatory duty on imports and announcing to impose one-time surcharge to rebuild flood-devastated areas. The government insisted the new system known as RGST would not impact the lives of impoverished segments of society already facing hard times due to an unprecedented price hike.

But other political parties – allies of the government and its opponents – do not buy this argument. They believe the taxation would make it hard for low-income groups to continue their everyday battle for survival.

“It is criminal to support this (RGST),” Opposition Leader in the National Assembly Chaudhry Nisar Ali Khan told media outside the parliament as his Pakistan Muslim League-Nawaz (PML-N) continued to press government on price hike inside the house for third day running.

Members from the PML-N resumed their overnight sloganeering and desk-thumping against the recent wave of price hike, especially this month’s increase in the rates of petroleum products. Unlike on previous occasions, the party got a boost from other opposition groups whose lawmakers put their weight behind a demand by the PML-N to let it table a resolution against inflation.

The entire opposition, though faced with internal fractures, put up a united show to seek the approval of the resolution from the lower house, a demand the government called an attempt to politicise the ‘miseries of the people’.

Voices were also heard from the allies of the government – Awami National Party (ANP) and Jamiat Ulema-i-Islam-Fazl (JUI-F) – which called it a move that would further compound the problems of the poor.

But the loudest objection to both the RGST and the proposed flood surcharge came from the Muttahida Qaumi Movement (MQM).

The party’s parliamentary leader in the National Assembly Dr Farooq Sattar told media at a hurriedly-called news conference in the evening that the group would not support the legislation at any cost.

“It is an anti-people bill. A tsunami of inflation will follow if it is approved. It will put an unbearable burden on masses. It will slow the pace of economic growth,” Dr Sattar told media, making his party’s stance on the RGST crystal clear.

Sindh Assembly walkout

In Sindh Assembly, the MQM staged a walkout against the one-time flood tax on Thursday.

Parliamentary leader of MQM Syed Sardar Ahmed announced a walkout against the speeches of PPP members in which they said the flood tax bill would be tabled in the assembly soon.

Published in The Express Tribune, November 12^th, 2010.

COMMENTS (9)

Afzal Rahim Khan Yusufzai | 13 years ago | Reply This Reformed General Sales Tax (RGST) bill comes from the party which has the slogan Roti Kapra Makan. Instead they should come up for the new slogan for 2013 Election Bouk, Kafan aur Qabar. Jiyai 1000%. Pakistan Khappai !!

M.S.Shaikh | 13 years ago | Reply I am holding my breath on the MQM. They have always trumpeted their origins and anti-feudal stand. Now let us see what trick they have up their sleeve. Walk-outs are lame. Presence and the vote counts in the end. As mentioned in one of the above comments, i believe Punjab assembly will eventually pass it. Sindh, KP and Baluchistan will be a walkover. The real test is the national assembly. This anti-awam government and their partners should mend their ways. After all their shenanigans, are they still surprised that there is building (though meager) support for Pres. Musharraf?

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Farah | 13 years ago | Reply Taxes are the need of the hour, RGST is being opposed by the media-driven groups of our society as sales tax regime is already in the system (sales tax on services too). RGST alongwith Wealth Tax should be introduced to enable Pakistani leaders to look world leaders in the eye.

Syed A. Mateen | 13 years ago | Reply Ordinary people of Pakistan are born to pay tax, super tax and super super tax to the government so that government should not face embracement in front of the IMF and World Bank. Since PPP government has taken the charge, it has stanched roti, kapra aur makan from the common man. Pakistan internal economic policy is a total failure. To help the ailing economy, the past and the present governments have been hiring Doctors of Economy in the shape of Dr. Shaukat Aziz, former World Bank employee, inducted as Finance Minister by General Pervez Musharraf and later elevated to the position of Prime Minister, Dr. Shaukat Tareen former Head of Bank of America and now Dr. Abdul Hafeez Sheikh, also a former World Bank employee and a failure Minister of Privatization of General Pervez Musharraf’s regime. How can these Doctors of Economy run the country in a profitable manner when they cannot make a budget of a common man whose salary is been fixed Rs.7,000 per month by the sitting Prime Minister? How can one expect that a Finance Minister who cannot make budget of a common man in Rs.7,000 can run the government into profit?

Naveed Ahsan | 13 years ago | Reply Long after the waters have receded, the floods seem ready to leave more than the 20 million affected high and dry. The constant deliberations on how to go about imposing a one-time flood tax and internally raising funds for the rehabilitation of the flood-affected seems to have finally gained some traction. However, if we were hoping for some fair and even distribution of the tax burden that is being dumped upon the citizens, we were sadly mistaken. The federal cabinet has approved an increase in the income tax of those individuals whose salaries are more than Rs 300,000 annually, starting from January 2011 for six months. This aims to generate some Rs 40 billion for the flood-affected. Pakistan is a developing country; our economy is not strong enough that it could absorb such great shocks like flood and earth quakes. Flood victims are our responsibility and they are very much part of Pakistan, if we will not exert efforts for their rehabilitation, no outers sources will come to rescue. Opposition parties must realize the miseries of flood victims putting aside the personal interests. If opposition parties want Govt to drop the idea of imposing RGST they must come up with some alternative for the rehabilitation of flood victims. In fact opposition is just scoring points and have no sympathies with the flood affectees.

Ahmer Ali | 13 years ago | Reply Assalam-o-Allaikum Warahmatullah.Now the real test time has begun for the claimers [(PML (N) and (PML (Q)] for the whole nation for welfare and betterment and the whole nation shall see the real face of these parties and shall know that either these are parties are sincere and honest for the nation and Pakistan or not when the RGST bill shall be presented in National Assembly and Parliament for final approval through voting to implement from 1st January,2011 because these parties have majority in National Assembly and Parliament and this RGST bill shall be approved by majority of votes.Now the whole nation shall see either these parties approve this RGST bill or oppose it or these parties claims of betterment and welfare are just hypocritical statements.

Jafakush | 13 years ago | Reply Cut the cabinet size, that what PPP supporter economist Hafeez A Pasha said.

SFA | 13 years ago | Reply Tax the damn fuedal landlords instead of people who are already under the tax net! Start with the zakat equivalent of 2.5% on the landed segment of the economy else expect brain drain from the salaried segment.

Asrar Ahmed | 13 years ago | Reply Let us not be under illusion. Brute majority of members sitting in assembly do not pay taxes so it will make no difference to them to further tax the citizens. RGST is Sales Tax + Services Tax. Tax on Services is a provincial subject so provincial assemblies have to pass the bill. Let us wait and see if Punjab assembly passes the bill.......my hunch is they will pass the bill with bit of drama.. Some drama will happen in NA,but the bill will pass.We hope MQM which has strong base in business hub of Pakistan--Karachi stands firm and demands a total reform of entire tax system in Pakistan and does not "vote" in favour of RGST.They have to be present in assembly and vote against it...... boycott does not count as votes of members present are counted. We also hope PML (Q) and PML(N) also 'Vote" against the bill. People are really suffering. Those who are paying tax are being squeezed further.

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