Provinces set to impose 16% GST on services

[Naveed Yaseen]

Provinces set to impose 16% GST on services

* Rs 30 billion would be generated through imposing tax on 13 types of services

By Sajid Chaudhry

ISLAMABAD: All four provinces are set to announce an imposition of 16 percent general sales tax (GST) on 13 types of services in their upcoming budgets, official sources told Daily Times on Tuesday.

They said the federal government would collect the proceeds on the new GST.

According to initial estimates, around Rs 30 billion would be collected through the new tax impositions and after deducting 2 percent collection charges, the federal government would then transfer the remaining amount to the respective province.

Taxation: The businesses likely to be taxed are private security agencies, stockbrokers, town planners, contractors, property developers, architects, interior decorators, credit rating agencies, information technology consultants, technical consultants, scientific consultants, engineering consultants, tour operators, travel agents, specialised agencies like money changers, and packing companies, the official sources said.

Under the constitution, the federal government can impose GST on goods and the provinces can tax the services sector. But the sources said they were still doubts about the imposition of this tax in the NWFP and Balochistan, as the law and order situation in the two provinces continues to deteriorate.

They said the federal government was also likely to withdraw the GST Zero-Rating facility for the import and local supply of pesticides in finished form, dairy products and stationery items. This would result in the levying of the 16 percent on these items, making them costlier.

According to the sources, the zero–tax facility on dairy products and stationery items was being withdrawn due to the facility’s misuse, however, the imposition of tax on pesticides in finished form would help save foreign exchange on its massive imports.

The measure was likely to generate additional revenues of Rs Rs.9.5 billion from dairy products, Rs 1.162 billion from stationery and Rs 3.87 billion from pesticides.

http://www.dailytimes.com.pk/default.asp...009_pg1_10