GST Hike Looms: Government Weighs Options to Boost Revenue
Government Considers Raising GST Rate to Generate Revenue
The government is considering implementing strict enforcement measures and increasing taxes to generate a revenue of approximately Rs 650 billion. This move is part of the government’s efforts to boost revenue and stabilize the economy.
Among the measures being considered are increasing the withholding tax rate on property and the General Sales Tax (GST) rate on certain items, including tractors. The government has agreed with the International Monetary Fund (IMF) to extend the property price table in 42 cities until the end of September 2024, allowing the Federal Board of Revenue (FBR) to notify new rates in the coming weeks.
The FBR has rejected a proposal to increase the standard GST rate from 18% to 19%. However, the GST rate on low-rate items, including tractors, may be increased. Additionally, the government is considering increasing the withholding tax rate for the sale and purchase of property.
The success of these measures in generating revenue remains to be seen. It is unclear how much revenue will come from enforcement measures and how much from additional taxation measures. The government’s decision to raise taxes and implement strict enforcement measures is part of its efforts to address the country’s economic challenges.