ISLAMABAD: The business community has rejected the five per cent increase in General Sales Tax (GST) on petroleum products and termed the decision anti-business, while the decision has been challenged in the Supreme Court as well.
The Islamabad Chamber of Commerce and Industry (ICCI), during a meeting, strongly opposed the 5 per cent increase in GST on POL products and said that the decision would entail harmful impact on the economy and bring more problems to the common man.
ICCI President Muzammil Hussain Sabri said that in the wake of more than 48 per cent decline in oil prices in the international market, the people were expecting from the government to pass on its full benefit to them, but the further hike in GST on POL products would deprive them of any such relief.
According to the press statement, he said the government was collecting more than Rs8 billion per month from petroleum levy which ranged from Rs6/per litre to Rs14/per litre while the imposition of 5 percent more tax in addition to 17 percent GST would significantly dilute the beneficial impact of reduced POL prices and greatly enhance the transportation cost thus badly affect the business activities.
President ICCI said already the 17 per cent GST in Pakistan was amongst the highest in the world as compared to the average of around 12 percent GST in Asia and there was a dire need to bring down this indirect tax to single digit level in order to facilitate the growth of business and economic activities. However, the government has further increased this tax on POL products taking it to 22 percent, which has no precedent in the world. He was afraid that in case of upward trend in oil prices in international market, high taxes on POL products in Pakistan would become unbearable.
Meanwhile, the Lahore Chamber of Commerce and Industry (LCCI) has Wednesday welcomed another cut in petroleum prices and said that it would help bring down cost of doing business in Pakistan, however, the All Pakistan Anjuman-e-Tajiran has criticized the government move of increasing General Sales Tax (GST) on petroleum products from 17 per cent to 22 per cent cutting relief for consumeRsof an estimated Rs5 billion.
APAT general secretary Naeem Mir warned the government that trader will approach the court against this illegal decision of the government which refused to approve another major reduction of up to Rs17 in petroleum prices on recommendations of Oil and Gas Regulatory Authority (OGRA). Naeem Mir said that oil prices at international level have dropped by over 45 per cent but the govt has not passed on this benefit to the consumeRsas just 20 per cent cut has been announced so far. “When the rates go upward govt makes OGRA responsible for this hike and refuse to interfere but now the authorities are interfering and have become hurdle to facilitate public. It seems that government was reducing the rate of oil due to pressure of PTI sit-ins as the govt has now imposed additional levy on petroleum instead of giving full benefit of international oil price cut as the sit-ins are no more continuing.” The government, under the article 77 and 162 of the constitution, cannot impose tax without the approval of parliament but it is imposing new taxes through SROs unconstitutionally and the recent Supreme Court’s decision has stopped this illegal practice of the govt in the past.
LCCI President Ijaz A. Mumtaz said that repeated cuts in petroleum prices shows present regime’s seriousness in putting the economy back on rail. He said that reduction in POL prices would certainly bring down the cost of doing business and Pakistani products would get their due share in the international market. He said that recent decision would not only give breathing space to the industrial sector but would also help agriculture sector prosper. LCCI former vice president Kashif Anwar observed that Pakistan agriculture sector is engine of growth. The decrease in petroleum prices would bring down the input cost of agriculture production as high speed diesel is being used in tractors, tube-wells, harvesters, thrashers and other agriculture machinery.
