Reformed GST: Challenges and Opportunities (PANEL DISCUSSION-II)

Asad Umar


Firstly I would like to appreciate the views and compliments.
I was mentioning to Mr Idrees Khawaja that perhaps they could have
chosen a much better representative for the private sector because my
view is distinctly in the minority in case of RGST. I will just share
with you where the private sector stands on the issue of RGST, what
their opinion is and then I will give you my own stance on the subject
as well as justification on the same. As you would know from newspapers
and other media, the private sector is strongly against the imposition
of RGST. The vast majority of chambers, which represent the bulk of
Pakistan’s private sector, have been vociferous in the opposition of
RGST. I must mention here that in addition to my responsibilities at
Engro, I also serve in the role of Chairman of Pakistan Business
Council, which was created a few years ago. Pakistan Business Council
comprises of largest business groups of Pakistan. Every single large
business group of Pakistan is its member, including some of the key
multinationals operating in Pakistan. Pakistan Business Council formally
supported the RGST, even during its hearing in the National Assembly
Finance Committee. Part of the difference that you see here can be
explained in terms which would be flattering to us. We have been part of
the industry since a very long time but we realise where the world is
headed, and understand that a modern country cannot progress and cannot
be run effectively with a tax-to-GDP ratio which is in single digit. But
since the private sector is not significantly represented here, I think
it is only fair that I try to bring forth where some of their
apprehensions come from. We at large businesses have management systems
and teams who are sophisticated enough to deal with complex systems. We
have the necessary resources which enable us to engage the most
expensive lawyers in Pakistan, and fight with the FBR when we see
corruption or unfair practices being carried out. We can also raise
issues that we face in front of the highest authority in the country.
The vast majority of the Pakistani businessmen are small traders or
small manufacturers. They do not have the systems and resources like
large companies. Moreover, fact of the matter is that the tax machinery
in Pakistan is both incompetent and corrupt. Therefore, it is a very
legitimate concern on part of the business community that the RGST will
make their lives difficult, more than the way economic theory portrays
it to be. This is because there are certain realities that have to be
looked at.

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