Govt sees Rs28bn loss

"Government is claiming that the RGST law implementation could lead to an additional Rs28-30 billion in the first year." — File Photo

ISLAMABAD: The government estimates show that an annual revenue loss of over Rs28 billion on 10 major products is expected owing to proposed single rate of 15 per cent under the reformed general sales tax (RGST) bill, a tax official told Dawn on Tuesday.

In absolute term, 80 per cent of the domestic sales tax revenue has been generated from the top 10 products at an average rate of 17 per cent besides special rate of 19.5 per cent on the telecom sector and 25 per cent on the natural gas, casting doubts over the health of the finance ministry projected figures that RGST implementation would yield additional revenue for the kitty.

Problematic tax reforms

The international community has stressed upon the government to effectively bring influential groups into the tax net. — File Photo
Revenue expansion continues to be one of the biggest challenges for the economy. Policy makers agree that without sustainable revenue growth, the state cannot step up development, reduce poverty and provide efficient service delivery. As a result, it can neither improve living standards of the people nor think of economic and political sovereignty.

The international community has stressed upon the government to effectively bring influential groups into the tax net while seeking its support for long-term macroeconomic stability and economic recovery.