RGST: January 1 deadline likely to be missed

FBR says political differences have impeded bill’s passage.

ISLAMABAD: The Federal Board of Revenue’s (FBR) board in council said on Tuesday that the reformed General Sales Tax is unlikely to be levied from the January 1, 2011, deadline set by the country’s economic managers.

Citing differences among members of the ruling coalition on the issue, the FBR council said the imposition of the new tax will take more time.

However, the board has given final touches to a briefing that will be given to opposition leader Nawaz Sharif in an attempt to win over his party’s support for the controversial reformed GST bill in parliament.

Last week Sharif agreed in a meeting with the PPP-led government’s economic troubleshooter Hafeez Sheikh to attend a briefing from the FBR.

FBR Chairman Sohail Ahmed told the council meeting on Tuesday that no date has been set for the proposed briefing, a senior officer told Daily Express on the condition of anonymity.

Ahmed admitted that the Sheikh-led economic team of the government had failed to convince Sharif to drop his opposition to the tax. He said that reformed GST has become a political issue as major parties opposed to the new tax are refusing to budge. And in such a scenario, implementation of reformed GST from January 1, 2011 seems unlikely.

The FBR council was also briefed on the federal government’s efforts to address the concerns of the provinces on the reformed GST issue. The National Assembly standing committee on finance, which is currently studying the reformed GST bill, has also been hit by controversies. And the council feared a delay in tabling the bill in parliament.

Another source told Daily Express newspaper that Abrar Ahmed, FBR’s member sales tax, pointed out lacunas in the centralised sales tax refund system (CSTRS) to be introduced under reformed GST.

Conceding flaws in the system, the Pakistan Revenue Automation Limited assured the meeting that it would enhance the capability of the CSTRS. And for this purpose nine more servers would be installed after Muharram holidays.

However, it said that the overall performance of the CSTRS was satisfactory as 15,000 cheques for Rs13 billion had been issued so far.

Published in The Express Tribune, December 15^th, 2010.