ISLAMABAD, April 15: The tax authorities are reluctant to impose 15 per cent General Sales Tax (GST) on more items from the next financial year as has been demanded by the International Monetary Fund.
Well-placed sources told Dawn on Tuesday that the IMF had asked the Pakistan government to impose 15 per cent GST in the budget of 2003-04 on bricks, cement blocks, computer hardware, software, specific machinery and real property.
The IMF has also recommended imposition of the GST to all services except residential rent and health, education and financial services, once the administration of the current tax-base was suitably stabilised.
The sources said the tax officials had conveyed their concern to the IMF that the levy of the GST on these items was not practical, which they believed would cause harm to end consumers and production of these items.
Elaborating further, the sources said that the tax officials had also told the IMF that bricks and cement blocks industry employed a number of people in rural areas.
They said the levy of the GST on that sector would not only result in un-employment but also hamper construction activities in the country.
Rejecting the levy of the GST on computer hardware and software, the sources said that with taxing these items, its prices would shoot up immediately, thereby undermining government efforts to promote information technology in the country, the sources said.
