Islamabad Chamber of Commerce and Industry has called upon the government to immediately withdraw the recent hike in GST on POL products taking it from 17 percent to 27 percent within a short period of one month as it will neutralize the benefit of falling oil prices, enhance transportation cost and put extra burden on the common man. 

 

Muzzamil Hussain Sabri, President, Islamabad Chamber of Commerce and Industry said that government had taken laudable step by reducing POL prices in the wake of falling oil price in international market. However, its decision to impose five percent more GST on POL products in addition to five percent increase made in December 2014 would dilute the beneficial impact of decline in oil prices and create problems for economic revival of the country. 

 

He said the rising oil prices in global market had significantly pushed up the cost of doing business in Pakistan apart from bringing lot of miseries to the general public. However, in the wake of huge decline in global oil price, it was the need of the hour that government should have passed on full benefit of reduced oil prices to the people. But instead of providing relief, government has enhanced GST on POL products which will significantly neutralize the positive impact of falling oil prices and affect the economic growth of the country. 

 

He said it was unfortunate that instead of broadening tax base to improve tax revenue, government was imposing higher taxes on POL products without realizing that such measures would retard growth in all sectors of economy and make the lives of poor masses miserable. He said government should also make proportionate cut in electricity tariff in the wake of hefty fall in oil prices to facilitate the growth of industry and provide relief to common man.

 

Muzzamil Sabri stressed that government should focus on improving direct tax collection and making hefty cut in GST as it was collecting around 44 percent of total revenue from GST which was an indirect tax. He said hike in GST badly affected the purchasing power of the common man which ultimately impacted the growth of business activities as growth of business was strongly linked with better purchasing power of people. 

 

He urged that government should set its priorities right in order to create better conditions for the economy to grow and reduce taxes on petroleum products that would bring down inflation, provide sufficient relief to people and accelerate the growth of business and industrial activities.