Business community in a meeting at Islamabad Chamber of Commerce and Industry has strongly opposed the imposition of 5 percent additional General Sales Tax on petroleum products and called for urgent withdrawal of this anti-business and anti-people decision as it would entail harmful impact on the economy and bring more problems to the common man.

 

Muzammil Hussain Sabri, President, Islamabad Chamber of Commerce and Industry said that in the wake of more than 48 percent decline in oil prices in the international market, 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. 

 

He said the government was collecting more than Rs.8-billion per month from petroleum levy which ranged from Rs.6/per liter to Rs.14/per liter 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. 

 

He said already the 17 percent GST in Pakistan was amongst the highest in the world as compared to the average 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. 

 

He said the current precarious economic situation demanded more facilitation measures for private sector to give boost to business and industrial activities. However, instead of giving more space to private sector for economic revival, government was taking decisions that would further enhance the cost of doing business and slow down economic activities.

 

Muzammil Sabri also rejected the proposed 30 percent increase in gas tariffs from next calendar year that would almost cripple manufacturing activities and hurt exports. He said instead of increasing taxes on POL products, government has many other better options to improve its revenue collection. He stressed that government should immediately eliminate all tax exemptions/concessions, bring all taxable incomes into the tax net and focus on developing a fair and equitable taxation system that must facilitate economic growth instead of stifling business activities.