IMF wants govt to impose 18pc GST on POL products, unprocessed food, stationery. The International Monetary Fund (IMF) has recommended the FBR to bring several dozen items into the standard rate of General Sales Tax of 18 percent, including unprocessed food, stationery items, medicines, POL products and others.
The IMF has estimated that the rationalization of GST rates could yield revenues of 1.3 percent of Gross Domestic Product (GDP), equivalent to Rs1,300 billion in national kitty.
However, the IMF has not made its assessment if such a drastic measure of GST is imposed through hiking in indirect taxation, how much it would push inflation up in the months and years to come.
The IMF’s recommendations highlighted eliminating the Fifth Schedule, removing exemptions of the Sixth Schedule and removing the reduced rate of tax under the Eighth Schedule of Sales Tax. The IMF is asking for the elimination of all zero ratings under the Fifth Schedule except for exported goods, restrict exemptions under the Sixth Schedule to only supply of residential property (except the first sale) and bring all other goods to the standard rate of GST.
