PM summons EAC meeting today

ISLAMABAD - Prime Minister Syed Yousuf Raza Gilani has summoned an emergent meeting of the Economic Advisory Council on Wednesday (today) to sort out issues pending between the Centre and Sindh over Value Added Tax. According to a senior official, the Finance Ministry had requested the Prime Minister to intervene as the International Monetary Fund required the government to come up with final proposal in this regard in the next meeting scheduled for August 23 at Washington. The official was of the view that the date for meeting with the IMF was staggered from August 5 to August 23 due to the same reason. The IMF has asked the government to come up with a clear proposal with practical framework for implementation of general sales tax on service with the name of either VAT or GST reform, he added. The official told TheNation that the Finance Ministry and the government of Sindh had already resolved most of the conflicting issues of collection of GST on service. He said that the govt of Sindh had almost agreed upon the modus operandi for collection of GST on services in different categories. The provinces like Sindh would be allowed to tax standalone service. The GST on services is clearly in purview of the provinces under the Constitution especially after the recent eighteenth amendment in it. Therefore, Sindh or any other province was rightfully demanding the collection right, as well. But the World Bank and the Finance Ministry were on the same page on conception that VAT could not be a successful experiment if it was not collected in an integrated fashion across the country. And the integrated collection was only possible through the Federal Board of Revenue. Other than the standalone services, the FBR would collect the GST on services in the provinces on their respective behalf and the collection would be transferred to them back respectively after deduction of collection charges only, the official described the possible resolution of the conflict. Therefore, the official was hopeful that the VAT or GST Reform issue was most likely to be resolved during the EAC meeting under the Prime Minister.

ePaper - Nawaiwaqt