Agriculture tax proposed in Pakistan

ISLAMABAD - The Pakistani parliament’s standing committee on finance has recommended levying agriculture tax while granting exemption to eatables, textbooks and life-saving drugs in the proposed new tax structure.

The new tax structure, titled reformed general sales tax (GST), has given rise to a raging debate in Pakistan with several political parties and leading industry leaders opposing it openly on the grounds that it will increase cost of production that will consequently increase inflation.

In the meeting of the committee Thursday, the members agreed to retain exemption for textile sector at zero rating.

As many as 29 proposals have been given in the bill. Fourteen of these were unanimous while the remaining 15 have been given by members belonging to different parties individually.

Senator Ishaq Dar of PML-Nawaz in his note of dissent has alleged that the government is looking to levy new taxes without trying to curb rampant corruption worth Rs.400 billion annually in different government departments.

Khursheed Ahmad of the Jamaat-i-Islami has said that the reformed GST bill is being moved at the behest of the International Monetary Fund, which is a violation of the Pakistani constitution.

Committee chairman Senator Ahmad Ali said that the directions of the committee have been forwarded to the government.

The Pakistan government is looking to expand the tax net by including sectors that were non-taxed earlier in the GST.

The bill is expected to be tabled in the Senate for approval later Thursday and needs simple majority of the house for it to be accepted.

The reformed GST has been kept at a flat 15 percent for all sectors instead of a select few earlier and is expected to generate an additional Rs.50 billion annually to the national exchequer.

(Awais Saleem can be contacted at ians.pakistan@gmail.com)