Government Is Considering To Reduce Sales Tax From 17pc To 12pc

[AsifIjaz]

Good move. Couple this with reduced duties on raw materials on house hold or daily use products and jack up the finiahed products made of the same.
This will incentivize to set up their production in Pakistan

 

[ps3linux]

My two cents, I dont think siasat.pk is a credible source of info besides lots of suggestions are being thrown in by different people at different points in time, nowadays every "genius" or lack of IQ thereof once throws a wild idea leaks the same to some media friend without giving any thought. I may be wrong but I think only 30% is collected through direct taxes while rest is through indirect taxes. Any downward adjustment in GST will severely impact the revenue collection.

On another note have a look at your electricity bills two very strange entries PTV fee, NJ surcharge. How much of that fee goes to PTV is a mystery, NJ surcharge we have been paying it for eons and I am sure will continue to pay even when the project completes its life cycle a 100 years from now, reason is simple there are two way to increase your share of pie, grab a bigger one or increase the size of the pie. Increasing indirect taxes (grabbing a bigger one) takes just one SRO and all manufacturers/retailers start charging it to the poor end customer retrospectively, while increasing taxes through broadening the tax base (increasing the size of the pie) requires lot of effort, capacity building of FBR, forward thinking, scenario/probability analysis backed by solid data.

Unfortunately I have enough interaction with the Pakistani bureaucracy that I have concluded that it is a corrupt/inefficient/incompetent and rotten to the core bureaucracy which is incapable of taking the country forward in leaps and bounds slow progress through natural growth or regression is very much possible through this bureaucracy.

Now about indirect taxes, in US the average income spent on food is 9-12% various reason however, economist tend to agree on 14% average on food, Pakistanis however spend about 42% on food (2014 data) CGT/VAT is the one thing which has a direct impact on this spending, add about 20-30% on education (depending upon school and type of education through private schools), healthcare another 10-20%, utility bills, transportation (petrol) one of the bitter reasons why we are so aggressive/short tempered/irrational and easy to provoke. My figures may be off, but the food data I saw back in 2014, prices of food items have not decreased rather increased in the last 5 years.

I 'd love to see this but it will not be a practical step till the time direct tax collection starts growing exponentially.

 

[Code_Geass]

since they have nullified all all SRO for different sales tax for different items it is possible may be next year to do this.

 

[Rizwan Alam]

Any other source??

 

[zn426]

Poor decision again. Just let the economy get back on track and enough with these subsidies and tax reductions.

Economy is off track because no one knows what the economy looks like. There's plenty of money in Pakistan, the problem is that because so much of it is undocumented, there's no way to have a stable economic and fiscal policy. Having accurate tariff collections will also document exports to other countries, which will allow the GOP to paint the true economic picture of Pakistan. I'm not in favor of a high GST, I think it discourages trade and entrepreneurship, but it will help with documenting the economy and allowing the goverment to have clear plans for education and also economic policy.
That said, one person mentioned that they should unify the tax code, and I think that's a huge step forward. The US has two major tax rate schedules for income (normal income tax and capital gains rates), and if Pakistan adopted a similar model, I think it would provide a huge incentive for Pakistani business to get in compliance.