The newly proposed General Sales Tax Act 2010 and Finance Amendment bill 2010 has faced opposition from both the coalition partners of the government as well as the opposition parties. Both sides are emphasizing on ministry of finance to eliminate corruption first in different institutions of the ministry of finance.
Mr. Ishaq Dar a former finance minister and an important member of PML (N) while addressing to the meeting told that during last 10 years, the tax to GDP ratio has decreased to 9% from the level of 14%, he also added that budget deficit has reached to the level of 700 billion from 150 billion rupees. He said that revenue generation can be increased Rs 100 billion to Rs 150 billion by implementing painful cuts across the board. Another way to increase revenue is to implement the Capital gains tax on real estate in the form of wealth and agricultural taxes. Elimination of corruption from different institutions of ministry of finance is necessary before implementing any measures. He also said that Government could save 800 billion rupees loss by controlling corruption; instead of implementing Reformed GST. Mr. Ishaq Dar also suggested the GoP to collect Non performing debts.
Another member of the Senate Mr. Talha Mehmood of JUI said that implementation of RGST is a conspiracy by the International financial institutions to weaken the country. He also advised the Government of Pakistan to focus on relying on its own resources instead of getting aid from these financial institutions. Mr. Tahir from MQM has indicated towards the increase of inflation rate from 40% to 45% due to the implementation of RGST.