VAT abolished: Finance Sec

[Hyde]

VAT abolished: Finance Sec​

Updated at: 1051 PST, Saturday, June 19, 2010
VAT abolished: Finance Sec. ISLAMABAD: Finance Secretary Salman Siddiqui has said the Value Added Tax (VAT) has been withdrawn and now, the volume of tax collection will be magnified through bringing reforms in General Sales Tax (GST), Geo news reported Saturday.

This he said talking to media outside parliament house. “The government aims at multiplying its income either by bringing reforms in GST or imposing VAT”, he said.

“There is no need to impose VAT if government succeeds in increasing income by bringing reforms in GST”, he maintained.

Salman Siddiqui said imposition of VAT was never a condition from IMF instead it wants Pakistani government to multiply its income in order to bring balance in payments of loans.

Government of Pakistan will likely hold a meeting with IMF officials to discuss this issue in July’s last week, he added.
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Again

 

[Creder]

^ they are doing the right thing, lets see how it turns out

 

[xenia]

VAT abolished: Finance Sec​

Updated at: 1051 PST, Saturday, June 19, 2010
VAT abolished: Finance Sec. ISLAMABAD: Finance Secretary Salman Siddiqui has said the Value Added Tax (VAT) has been withdrawn and now, the volume of tax collection will be magnified through bringing reforms in General Sales Tax (GST), Geo news reported Saturday.

This he said talking to media outside parliament house. “The government aims at multiplying its income either by bringing reforms in GST or imposing VAT”, he said.

“There is no need to impose VAT if government succeeds in increasing income by bringing reforms in GST”, he maintained.

Salman Siddiqui said imposition of VAT was never a condition from IMF instead it wants Pakistani government to multiply its income in order to bring balance in payments of loans.

Government of Pakistan will likely hold a meeting with IMF officials to discuss this issue in July’s last week, he added.
=================
Again

after the meeting he ll say..IMF doesnot require VAT but its good for pakistan!
GST reforms..oh well said n reminded!

 

[Hyde]

they keep changing their decisions...... thats what i don't like in this government

they should take an advice from authorities and should come up on tv after making a final decision only

One day they say VAT imposed second day abolished then imposed again and then abolish again

 

[Creder]

they didnt want to impose VAT remember, they only did that to get the money

 

[xenia]

they keep changing their decisions...... thats what i don't like in this government

they should take an advice from authorities and should come up on tv after making a final decision only

One day they say VAT imposed second day abolished then imposed again and then abolish again

political pressure..
wait for a few days..muj policy making bureaucracy me jane do..everything ll be set!

 

[xenia]

they didnt want to impose VAT remember, they only did that to get the money

n 1 installment is left still..

 

[rubyjackass]

VAT is good in the long term to get steady tax collections. I dont know why people are afraid of it. Can somebody explain what ill-effects VAT can bring? I don't see anything horrible happening in India but there must have been some side-effects. So please care to explain.

 

[BATMAN]

How much %VAT is applied in India?

 

[rubyjackass]

There are two categories. One has 4% and another has 12.5%. The higher VAT applies for luxury items broadly.

And btw some commodities are exempt from VAT obviously.
Further for gold and precious metals VAT is 1%.

 

[BATMAN]

This means you don't have GST?
Essentialy, GST and VAT is same thing... and in principle does not make sense to apply them in parallel.

 

[Old School]

Eventually a good decision. It was never possible to collect VAT in line with the fiscal target due to various exponential factors. Thus it caused only distortion in the revenue projection. Flat rate tax is the answer for countries like ours where people do not want to pay any tax except the municipality taxes. VAT works only when there is a transparency regarding the true turn over of businesses. Businessmen do not pay the VAT but the consumer do while businessmen collect this VAT and this VAT never end up in the state exchequer.

 

[Neither Right Nor Wrong]

Looks like Pak govt buckled under the pressure of the opposition and provincial govts.

Present tax base for GST is only one fourth of the tax base when GST was first introduced in 1990.This was as the result of many sectors receiving exemptions over the years.

Hence VAT was introduced to bring back the tax base to 100% in one go but as VAT will not be introduced, so the govt. will have to follow longer and much more tedious way of bringing exempted sectors back into the tax net one at time.
But the net result will be the same as the common man(end consumer) will have to shelve at least same amount of money and in some cases more.

Coz sales tax varies form 17%(increased 1% this year) to 25% depending on the sector involved but if VAT had been introduced it would have been even 15% on all sectors .

So individual commodity prices would have come down but
number commodities being taxed would have increased but the same will be the case if exemptions are removed to reform the GST, only difference is, this process will take much longer.

Plus these tax reform was Pak govt's own initiative and not IMF's recommendation, the only govt folly was their letter to IMF committing to the tax reforms through introduction of VAT, which has been played by Pak media as an evil IMF design to hurt the common man.

In short it is a bad move which might even lead to holding up of last two IMF installments if some tax reforms are not brought in soon.