LAHORE: The Institute for Policy Reforms has issued a fact sheet that revealed the true impact of the latest SRO for increase of GST on petroleum products. The general perception is that GST rate increase will only partially recover the estimated Rs70 billion loss in public revenue from the decline in oil prices. In reality though, the government will collect Rs36 billion more revenue than it did before prices declined.
In one stroke, government has increased proportionate tax rate on petroleum by 60%. The fact sheet estimates total welfare loss of Rs80 billion to the people.
This SRO negates the potential benefits to the economy from falling oil prices.
