Re: PPP government's crazy borrowing is similar to current US debt ceiling crisis
First you tell us what VAT means, and then we will see if it is implemented or not.
Ok, I'll explain it anyway. But do tell us what you think VAT is.
"RGST" and "exemption of some products from GST" are two independent concepts. You are mixing the two.
RGST is not only name but actually possess a clear definition which everyone in the world understand. The definition says that it is VAT. And that is what PPP government was planning to implement across the board except some food items. MQM stopped it.
On the other hand, if the government wants to withdraw exemption from various products then it does not necessarily need to introduce RGST. It can do it with GST. And it is not the first time the government changed products requiring or not requiring GST. It happens all the time.
But MQM did stop RGST. This is to MQM's credit.
Agri-tax is another discussion. And like I said, MQM's 25 members can not make the whole parliament made up of jageerdars present in all parties to accept its implementation. If MQM threatens to quit unless agri tax is implemented then that will be the end of MQM's political life.
Obviously that is what MQM haters like you want. You won't be satisfied unless you see MQM squashed under a truck.
However, I did hear one PTI member saying that PTI also wants agri tax implemented. That is a good news. So in future if PTI does win some seats then the voice of MQM against agri tax will strengthen.
General public don't need to understand what is the difference between Reformed General Sales Tax (RGST) & Value Added Tax (VAT), they are concerned about their household economics. The impact of withdrawing exemption (which have never been made in past on such a large basis as is done in last budget coupled with levying Sales Tax on various basic services including logistics, warehousing, etc) which will definitely result in increased inflation.
I again suggest that you should read the draft RGST bill and compare the same with amendments made through Finance Bill 2011 alongwith Sindh Sales Tax Act, 2011 and you will find the similarities in terms of monetary / economical impacts. The only clauses of RGST that have not been implemented are mainly related to procedural clauses such as Registration, documentation, etc.
The basic diffrence between VAT & GST is that in VAT everyone in supply chain (from Manufacturer to retailer) has to be registered and levy, bear Indirect Tax & transfer it to the next level until it reaches final consumer, whereas in GST regime there may be some unregistered persons in supply chain and its the manufacturer who levies Sales Tax, which is finally paid by the end user.
last but not the least, every party who is loyal to the public, should properly monitor government's monetary policies and take a stand against any odds without fearing the isolation. In fact, such isolation in National Assembly for public cause may win the party enormous public support in long term. If MQM / anyother party takes such steps, I will definitely vote for them against the blood sucking feudals.
PS: For fear of isolation and political death, we should look at our history where minority with a will to implement good things have always defeated majority.
