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Extension of GST to retail stage may delay till next budget

ISLAMABAD: The government will most likely delay extension of general sales tax to retail transactions until the announcement of the budget 2000-2001, sources in Central Board of Revenue told Fortuna on Thursday.

These sources said there was a general understanding among all departments of the federal government now that the levy entailed complex issues which will take a minimum of four months to resolve.

Meanwhile, sources in the ministry of finance said the delay was the result of a dicision taken in principle not to impose the controversial tax during the ongoing financial year.

"General sales tax on retail is a complex issue and needs extensive exercise before it is levied," sources said.

However, independent analysts attributed this change of hearts to a growing consensus at highest levels of the government that it ought to move ahead on the GST extension to retail transactions only after taking trading community into confidence.

"The CBR is presently in the process of negotiating with the traders community, and Member Coordination Riaz Malik has been specially assigned the task to reach an agreement with traders on this controversial issue," sources said.

Sources said that the government might face hard time in dealing with the International Monetary Fund since extending the GST to retail transactions is one of the foremost conditions for the resumption of the stalled ESAF programme. The Fund mission is arriving some time next week.

The Chief Executive said while unveiling his economic revival programme on December 15 that the GST will be made applicable on all stages as it was a tax that discouraged consumption and encouraged savings apart from being the basic tool for documentation of economy. Fortuna