The RGST melodrama

by Husham Ahmed

The recent coverage of RGST issue by a section of media has been distasteful to say the least. Instead of presenting facts, at times many news anchors and hosts of TV shows have been found slanting the news reports to fit their own agendas. The fact of the matter is that there are no new taxes being implemented in the form of RGST. While fixing the rate to 15 percent only the exemptions are being withdrawn while largely sparing the food items.

It is true that being an indirect tax the withdrawal of exemptions in various commodities will lead to rise in prices but at the same time it will also expedite the much-needed documentation of economy. Let’s face it we have to increase our revenues in order to control the deficit, which has already been contributing to inflation. No doubt the progressive taxes are the best way to go but in order to increase the tax base and document the different sectors of economy at each stage of supply chain, the reforms in general sales tax were inevitable.

Instead of debating and discussing the capabilities of FBR to implement the RGST, suggesting improvements and arguing on the content of RGST and Flood Tax, the media pundits have been predicting the doomsday scenario of how the government has been cornered by its allies and opposition combined. Even when the bill was passed by consensus in the finance committee of the Senate, a section of media reported defeat of the government based on dissenting notes and critical arguments.

Political parties have not been far behind in playing to the gallery. No party (except PPP) wishes to be seen in the public supporting the tax. JUI(F) as always has been trying to sell their vote to the highest bidder. The appeasement move, to appoint Sherani as the head of Council of Islamic ideology, left a bad taste. On one hand parties are signing the bill in the Parliamentary committees, and on the other hand out of the Parliament they are demolishing the chances of reaching any consensus on economic policy for the sake of popular politics. The bill will still pass as the government is most likely to get the numbers on their side, but that is altogether a different story.