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Monday, June 07, 2010


GST exemptions to be withdrawn in three months: minister

* Hafeez Shaikh says govt will reduce sales tax rate to ensure introduction of reformed form of sales tax
* Health sector is no more domain of federal government

By Sajid Chaudhry

ISLAMABAD: The general sales tax (GST) exemptions notified by the Sales Tax Act, 1990 will be withdrawn in the next three months after the enforcement of the value-added tax (VAT) from October 1, 2010, Finance Minister Dr Hafeez Shaikh said on Sunday.

Addressing a post-budget media briefing at the Planning Commission, the minister said the government would reduce the rate of sales tax in the next three months to ensure the introduction of the reformed form of the GST.

At the same time, sales tax exemptions would be eliminated, he added.

Shaikh said it was correct that the International Monetary Fund (IMF) and the Pakistani government had an agreement to levy the reformed form of GST and the government was committed to fulfil its pledges made with the IMF. However, “it is also a fact that services is the domain of the provinces and we will explain this to the IMF,” Shaikh said. He said that the government had delayed the enforcement of VAT for three months in order to take the provinces on board over the issue.

The minister said the IMF was not only concerned with VAT, but the fund also wanted the country to mobilise its resources to increase revenue.

PSDP: Shaikh said the 52 percent increase in the Public Service Development Programme (PSDP) of all the provinces was a historic achievement of the government. He said the province’s share from the federal divisible pool had been increased to 57 percent from the existing 50 percent.

The finance minister said the health sector was no more a domain of the federal government after administrative arrangements.

“Now the provinces have a greater role in the economy with regards to the health, education and infrastructure sectors,” he said.

Courtesy www.dailytimes.com.pk

 

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