ISLAMABAD: After IMF, the World Bank was not dictating Pakistan to meet its four upfront actions during the ongoing fiscal year 2021-22 to get $350 million loan.
The World Bank’s conditions require one General Sales Tax (GST) regime for the federal and provincial governments and amendment in the Fiscal Responsibility and Debt Limitation Act (FRDLA) through Parliament.
The other two conditions of the WB are circular debt removal as per the Circular Debt Management Plan (CDMP) and recovery of power sector outstanding arrears to qualify for approval of $350 million programme loan under Resilient Institutions Strengthening Program (RISE-II).
It is a fact that the harmonisation of GST between the federal and provincial government has remained a thorny issue before high-profile National Tax Council (NTC) as all parties concerned are making efforts to evolve consensus on the definition of goods and services, bringing uniformity related to GST laws, tax rates and scope of GST but have so far failed to get the desired results.
The PTI-led government was facing difficulties for moving ahead with harmonisation of GST because the GST on goods is the domain of the centre, while GST on services belongs to provinces in line with 1973 Constitutional arrangements.
