The International Monetary Fund (IMF) has
agreed with Pakistan to give relaxation on the much-debated and
much-controversial Reformed General Sales Tax (RGST), as Islamabad
assured the international donor that it would bring Plan-B which would
generate more revenue than the RGST in the coming budget 2011-12.
"Yes, the International Monetary Fund has agreed with Pakistan to not
introduce the Reformed General Sales Tax, and now we will adopt Plan-B
in which all tax exemptions will be eliminated in the annual budget
2011-2012, and this plan is more feasible than the RGST," The Nation
quoted a Pakistan Finance Ministry official, as saying. To a question, the official said that Pakistan did not demand the Letter of Comfort (LoC) from the IMF in its recent meeting, as "we only discussed budget-related issues".
The LoC would help Pakistan in getting budgetary support from the World Bank and the Asian Development Bank.
Under the Plan-B, the government expects Rs,1,968 trillion revenue in the coming financial year.
This includes Rs.90 billion on account of withdrawal of exemptions and zero-ratings given to textile, leather, sports, surgical sectors, which would be eliminated, additional Rs.254 billion through normal revenue growth and Rs.36 billion through administrative measures.
Under the Plan-B, the government would keep standard General Sales Tax (GST) rate at 17 per cent, while in the RGST the government had to decrease it to 15 per cent. (ANI)
