Ignored VAT

Since its adoption in France in the mid-20th century, the Value Added Tax (VAT) has become a leading source of tax revenue in many countries. The key to the effectiveness of VAT is its low enforcement cost, allowing it to raise far more revenue then is spent implementing it. Last year, in a first major retreat after the budget announcement, the government planned to withdraw the three percent value added sales tax imposed on 32 imported consumable and durable products besides lowering the sales tax liabilities of our oligopolistic car assemblers.

The government should come up with a sensible approach to implementing VAT. They can protect the vulnerable groups of society by increasing the exemption threshold and decreasing the standard tax rate. Besides, as revenue income will increase the state will be able to spend more on social welfare for the vulnerable.

Calimullah Khoso

Kashmore