Pakistan’s Senate passes reformed GST bill recommendations

ISLAMABAD - Amidst huge uproar by the allied and opposition parties in the Senate Friday, the Pakistan government managed to pass the recommendations for levying reformed general sales tax (GST) from the upper house of parliament.

The Muttahida Qaumi Movement and Jamiat Ulema-i-Islam, sitting in the cabinet with the ruling Pakistan Peoples Party (PPP), decided to oppose the new tax structure that aims to expand the tax net and bring in sectors that were exempted earlier.

Only Awami National Party, another government ally, chose to side with the treasury after initially announcing its rejection of the proposals.

The opposition Pakistan Muslim League-Nawaz (PML-N) voted against the bill, while the Pakistan Muslim League-Quaid (PML-Q) chose to walk out instead of voting against the recommendations. The opposition parties also raised slogans against the bill and thumped desks to display their resentment.

The reformed GST envisages levying a flat 15 percent sales tax on almost all sectors instead of the earlier scheme in which 17-25 percent was imposed on a few sectors only.

It is expected that an additional Rs.50 billion will be generated annually with this new tax structure.

PML-N Senator Pervez Rashid alleged that PML-Q had played dirty by walking out. Otherwise, it would have been difficult for the government to get it passed with simple majority. It is tantamount to treason with the general public, he regretted.

Senator Waseem Sajjad of PML-Q, though, argued that it is not a voting on the bill as such but only the recommendations. We vehemently oppose it and did not want to give this exercise any semblance of validity by participating in the voting process, he observed.

Finance Minister Abdul Hafeez Shaikh, on the occasion, said that the propaganda against the proposed reformed GST bill is baseless. We have to look towards the future and take measures accordingly. Otherwise, we’ll be cramped for resources, he pointed out.

The standing committee on finance of the Senate had approved the recommendations of reformed GST bill a day ago. Only 14 of the 29 recommendations were approved unanimously, while the committee chairman also submitted his note of dissent with the bill.