A. R. Jerral The Reformed General Sales Tax (RGST) Bill 2010 was tabled in the National Assembly on Friday, November 13, among great protests. That evening media broadcasts carried the loud and angry statements and vocal reactions of many leaders from the opposition and even the coalition partners of the government. The Prime Minister declared on the floor of the Lower House that this bill was discussed in the Cabinet, which had approved it and all the four Chief Ministers had given the go-ahead in a meeting of the Council of Common Interest (CCI). What the PM implied was that the protests launched by those opposing the bill were uncalled for. But the introduction of this bill was seen in the media as another possible setback for the government. The fact is that the RGST is a new name given to the old GST, with added element of Value Added Tax (VAT). The IMF advisors have been pressurising our finance managers to impose this tax on all transactions of goods and services for quite some time. There was and still is a violent reaction to the levy of VAT. But it seems that the government has finally bowed down to the IMF demands. If one takes the statements of the Prime Minister in the House and at the Lahore Airport on the face value, then one fails to understand why the opposition and coalition partners are raising objections. Nobody from the provincial governments has commented on the assertion that this matter was or was not discussed in the CCI meeting. The Punjab Chief Minister has announced that RGST will not be accepted by Punjab. The Federal Minister for Railways, an ANP coalition partner from Khyber Pakhtunkhwa, has also rejected this tax on behalf of his province. Likewise, Dr Farooq Sattar has categorically stated that the RGST and IMF package was never discussed in the Cabinet. Although these loud rejections and protests negate what the Prime Minister has said, yet the truth we mortals may never know? But why are all these guys making loud noises on the matter seems intriguing? One is reminded of an anecdote common in our villages. There was this simple village elder, who got involved in a hopeless litigation. His lawyer knew this fact, yet he took the case. In the court, he made long and loud speeches before the judge to indicate to his client that he was fighting the case with full vigour, but lost the case as he knew well before. Later, the village elder was heard saying that his lawyer fought the case with full vigour, but the judge was biased against him and that is the reason why he lost the case. One gets a feeling that both the opposition and the coalition colleagues, who are making loud noises, are acting like this proverbial lawyer. The line of reasoning taken up by them is somewhat intriguing. They claim that this tax when levied will increase the hardship of the masses that are already languishing under unprecedented price escalation. However, the commodity prices prevailing in the market are already beyond the reach of common man. Sugar touched Rs100+ and onions are touching Rs100. The opposition and coalition leaders objecting to the RGST will remain in the Assembly and the government; none will resign from his post. So this noise is just being made to convey to the masses that they are fighting for them vigorously. If and when the bill is passed and the RGST is enforced, the simple masses would hopefully say that their leaders did plead their case, but the government was biased against them. The coalition is a partner in the government and the opposition is 'friendly and that is not any mean achievement. In Pakistan, unfortunately, the whole tax system is based to protect the elite. The major share of tax is borne by the salaried class, as their income is well documented and is in full control of the government. Their tax is deducted at the source, thus they cannot hedge it. All other categories have the means and resources to hedge the incomes, and thus evade taxes at will. Our feudal lords do not pay any tax on incomes from the farms; in fact they resist any tax levy on agriculture income. Moreover, this income is not documented anywhere, and thus is never brought under the tax net. Vakil Anjum, in his book about Pakistans political families, listed the land holding of Ghulam Mustafa Jatoi at one million acres; income from his cotton crop was estimated to be Rs100 million each season. This maybe an exaggeration, but even at the half value this income can fetch a large some in taxes. Mr Jatoi or his heirs are just one feudal family, there are many more. If all these big landlords with huge incomes are brought under the tax net, the government can raise its revenue immensely. But that will not happen till these people sit in the assemblies and make decisions. The GST is already imposed, but how the RGST will differ from the existing tax is not yet clear. It is also not clear how RGST will differ from VAT; it is generally believed that RGST will be levied at 15 percent of the cost of goods and services, which is at a higher rate than the GST. We are already paying GST, withholding tax and excise duties on various goods and services. We pay these duties on our utility bills, cash withdrawals from our own accounts and even on chequebooks. These taxes were accepted with least or no protest. The finance wizards who advocate the VAT or RGST cite examples of UK and other countries where such taxes are charged. It is possible that IMF too cites these as examples, but one must remember that the VAT is not imposed on all items. The food items and necessities are exempted from this tax; in UK, children clothing, food items, essential medicines and many other items are free of any tax or VAT. Is our government also imposing this tax keeping this aspect in mind? One does not know yet, and those who are advocating this levy are silent about it One gets the impression that this tax is a broad based tax and levied on all goods and services. We are not against taxes, as it is a legitimate source of government revenue. What we, the masses, desire and hope is simple. We want that the tax net should be broadened in a manner that all citizens and all incomes are brought under the tax net, including farm incomes. VAT or RGST should be selectively imposed; food items, essential commodities, medicines, school books and essential education requirements should be exempted from this tax. This tax should not be imposed in haste under IMF pressure and compulsion. The government should take this step deliberately. It is hoped that those who are opposing the bill will discuss these aspects in the Assembly debate and then decide in favour or against it in a prudent manner. The writer is a freelance columnist.