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Reform extension seen positive for PPP-govt

IMF gives more time for RGST approval
ISLAMABAD: Economic experts here Tuesday termed IMF nine-month extension for stand-by arrangement as positive and an opportunity to complete the reform for General Sales Tax and correct the course of fiscal policy and amend the legislative framework for the financial sector.
Pakistan can use this period as an opportunity to further correct the fiscal policy to implement the reformed general sales tax (RGST) in the country, Dr Ashfaq Hassan Khan former Advisor Finance Ministry told APP here Tuesday.

He was of the view that Pakistan can implement the proposed RGST in two stages; firstly it can withdraw Sales Tax exemptions except on education, food items and basic medicines.
In the second phase, he said the government can impose tax on agriculture income to improve its tax to GDP ratio. Though, agriculture is a provincial subject, the provinces can ask Federal Board of Revenue (FBR) to collect the tax on their behalf as it has done in case of tax on services sector.
He was of the view that annually Pakistan is loosing up to Rs300 billion in the realm of withholding tax as organisations like restaurants/ hotels collect the tax from customers but do not pay it to the government. He added that tax to GDP ratio of the provinces has not increased for the past many years while they have potential of more tax collection.
Dr Ashfaq also called for reducing the size of the cabinet to minimise expenditures for the benefit of the country. Dr Rashid Amjad also welcomed the IMF decision.
He added that IMF supports Pakistan to improve the country’s balance of payment position which is in the country’s interest.
He added he did not think that IMF is imposing any conditionality by asking Pakistan to implement RGST as its implementation is in our own interest. -APP


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