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

Firstly I would like to appreciate the views and compliments.I was mentioning to Mr Idrees Khawaja that perhaps they could havechosen a much better representative for the private sector because myview is distinctly in the minority in case of RGST. I will just sharewith you where the private sector stands on the issue of RGST, whattheir opinion is and then I will give you my own stance on the subjectas well as justification on the same. As you would know from newspapersand other media, the private sector is strongly against the impositionof RGST. The vast majority of chambers, which represent the bulk ofPakistan’s private sector, have been vociferous in the opposition ofRGST. I must mention here that in addition to my responsibilities atEngro, I also serve in the role of Chairman of Pakistan BusinessCouncil, which was created a few years ago. Pakistan Business Councilcomprises of largest business groups of Pakistan. Every single largebusiness group of Pakistan is its member, including some of the keymultinationals operating in Pakistan. Pakistan Business Council formallysupported the RGST, even during its hearing in the National AssemblyFinance Committee. Part of the difference that you see here can beexplained in terms which would be flattering to us. We have been part ofthe industry since a very long time but we realise where the world isheaded, and understand that a modern country cannot progress and cannotbe run effectively with a tax-to-GDP ratio which is in single digit. Butsince the private sector is not significantly represented here, I thinkit is only fair that I try to bring forth where some of theirapprehensions come from. We at large businesses have management systemsand teams who are sophisticated enough to deal with complex systems. Wehave the necessary resources which enable us to engage the mostexpensive lawyers in Pakistan, and fight with the FBR when we seecorruption or unfair practices being carried out. We can also raiseissues that we face in front of the highest authority in the country.The vast majority of the Pakistani businessmen are small traders orsmall manufacturers. They do not have the systems and resources likelarge companies. Moreover, fact of the matter is that the tax machineryin Pakistan is both incompetent and corrupt. Therefore, it is a verylegitimate concern on part of the business community that the RGST willmake their lives difficult, more than the way economic theory portraysit to be. This is because there are certain realities that have to belooked at.