Govt mulls hiking GST to collect Rs650 billion for mini-budget

Prime Minister Shehbaz Sharif-led government is mulling increasing the General Sales Tax (GST) by 1 percent to 19 percent from the current 18 percent to boost the tax revenue, sources said on Friday.

The hike will be a part of efforts that are being made by the government to secure the deal of a $7 billion loan programme from the International Monetary Programme.

A hike in GST will help the Federal Board of Revenue (FBR) in boosting tax revenue generation to Rs650 billion for the mini-budget.

Earlier, it was expected that the chairman FBR would brief the PM about the mini-budget on Thursday, but the meeting was postponed.

However, the government is expected to decide about the mini-budget before its scheduled meeting with the IMF Executive Board on September 25.  

Primarily, the government was attempting to reach the targeted revenue by cracking down against tax evaders and increasing GST on properties, tractors, and other items. 

The authorities also surrendered the International Monetary Fund’s (IMF) pre-condition to jack up the valuation table for real estate in 42 cities by the end of September.

However, FBR has not yet issued a notification about revising property tax rates in the upcoming weeks. The tax body has also rejected the proposal to raise the standard increase to hike GST.

In an effort to reach the targeted tax revenue, the FBR planned some stern measures against non-filers and incorrect or incomplete tax filers, including freezing their bank accounts and imposing a ban on their purchasing of vehicles and properties.