ISLAMABAD – After its failure in passing NRO, the PPP-led federal government, Friday, suffered another moral setback when its coalition partners in the National Assembly not only opposed the Reformed General Sales Tax (RGST) Bill, 2010, but also termed it a final nail in the coffin of Pak economy.
Whereas the opposition parties, PML-N and PML-Q, protested against the RGST during the Lower House proceedings, members of the MQM and ANP that are coalition parties in federal as well as provincial governments of Sindh and Khyber Pakhtunkhwa also chanted slogans against the imposition of any new tax.
Minister for Labour and Manpower Khurshid Shah, however, approached the ANP legislators presumably to convince them but all in vain.
They, including Bushra Rehman, remained firm to their stand. It was the second time when PPP seemed alone in the House and the Finance Minister Hafeez Shiekh had to lay the RGST bill 2010 and flood surcharges, in an environment charged with protest on the last day of the 26th session of the Lower House.
“The bill will reform the sales tax regime by introducing and implementing a broad-based tax on sale and purchase of goods in all areas of Pakistan and services in the Islamabad Capital Territory (ICT) on an integrated basis with taxes on sales and purchases of services, specified by the provinces so as to form a broad-based and integrated tax regime on consumption in Pakistan” Hafeez Shiekh said while introducing the RGST Bill 2010.
“We oppose the RGST. Actually, it is an indirect tax that will be imposed on the production of all things. If it gets through, it will be a final nail in the already sinking economy of the country,”, Dr Farooq Sattar the senior leader of MQM commented. It is VAT in the guise of RGST, Sattar added.
Prime Minister Yousuf Raza Gilani who was in the House at the time had to come forward to calm down the situation as he had been asking opposition and his coalition partners to sit down and let the finance minister introduce the bill and they could later oppose it at the concerned standing committee.
PM Gilani brushed aside the impression that the bill was being introduced without taking opposition and coalition parties on board and said that the House had been discussing it for the last six months.
“It is discussed in Cabinet which approved it while in the recent meeting of the Council of Common Interest, all the four chief ministers gave go-ahead to the federal government for imposing RGST”, he said. The Prime Minister said that the country needed Rs160 billion for reconstruction and rehabilitation process after natural disaster while after 7th NFC Award the resources were shifted to provinces, which had refused the federal government to contribute in the rehabilitation process.
“We, the federal government, accepted it. We will not go for any undemocratic move. The bill will be introduced according to the order of the day, however, it’s up to the House whether it accepts it or not”, the Prime Minister said.
Responding to the Leader of the Opposition Ch Nisar Ali Khan regarding the incident that took place with Law Minister at Constitution Avenue where allegedly some army officials aimed guns at the minister, Prime Minster said that he himself contacted Law Minister who expressed ignorance of any such incident occurred with him.
“When the Law Minister himself was not accepting it then what kind of report you are seeking. Why you want from us to condemn this institution,” Prime Minister said while addressing the Opposition Leader. Earlier, Ch Nisar Ali whereas not only demanded the report of the incident but also cautioned the Government that it would have to throw 145 members out of the House for the passage of the RGST bill. Later, Dr Farooq Sattar rejected the claim of Prime Minister and said that RGST and conditionality of IMF packages had never been discussed in the Cabinet. “I and Babar Ghori attended a number of Cabinet meetings and during these meetings, RGST and IMF package never came under discussion”, Sattar said. He said RGST would be implemented on every single commodity and would directly put a burden on the people. We are shedding crocodile tears…a tsunami of price-hike is in the offing,” he said. Farooq Sattar offered to generate Rs1,000 billion from the countryÂ’s economy and the budget. He demanded imposition of agriculture land tax besides reforms in FBR, PIA, Steel Mill, PEPCO, land and WAPDA to generate Rs160 billion.”