ISLAMABAD, April 20: The government is likely to reduce the General Sales Tax (GST) from 20 per cent to 15 per cent on most of the goods from the financial year 2002-03.
Well-placed sources told Dawn on Saturday that the decision was taken because no tangible increase in revenue had been registered from the raise made in the GST during the current fiscal.
During the budget 2001-02, the government had raised the GST to 20 per cent on more than 200 goods, imported or supplied, aiming to raise the revenue.
The sources said that the decision was also in line with the International Monetary Fund (IMF) condition for getting the next tranche of Poverty Reduction and Growth Facility (PRGF).
The raise in the GST, according to sources, resulted in the low consumption of these goods as compared to last year’s.
Also, it was not technically convenient for the tax authorities to maintain two different slabs for GST, the sources said.
The tax authorities collected Rs114 billion under the head of sales tax between July and March of the current financial year as against the target of Rs116.37 billion set for the same period, showing a decline of 1.95 per cent.
When compared to the last year’s collection of Rs108.34 billion, it registered only a growth of 4.4 per cent, even though during the last year’s budget the GST was levied at the retail stage on most of the goods, besides at the import stage.
Further breakup showed that the tax authorities collected Rs66.07 billion under the head of sales tax at the import stage during the same period against the Rs63.9 billion it collected during the same period last year showing an increase of 3.4 per cent.
Similarly, the tax authorities have collected Rs47.01 billion at the domestic level during the nine months of the current financial year as against Rs44.44 billion it collected during the same period last year, registering an increase of 5.8 per cent.
