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With increase in GST, ordinary Pakistanis to pay more for essentials

Internews Report

KARACHI: The one percent hike in the General Sales Tax (GST) from 16 to 17 percent in Pakistan’s budget for fiscal year 2013-14, which begins from July 01, coupled with increase in taxes on edible oil imports will push up the prices of many essential items.

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Wholesalers and retailers term this move as a bad omen for consumers from the new government of Prime Minister Nawaz Sharif who have already paid high prices during the last coalition government led by Asif Zardari’s Pakistan People?s Party.

“I do not see any relief from the government as a one percent hike in GST is bound to enhance the price of many products especially packed items,” Karachi Retail Grocers Group General Secretary Farid Qureshi said on Thursday.

While hailing the government’s move to encourage documentation and bringing more traders in the tax net, he said: “I cannot term the overall budgetary measures as anti-consumers but the government is looking forward for some sacrifice from the end users that would come in shape of price hike in various items.”

Karachi Wholesalers Grocers Association Chairman Anis Majeed said that all packed items will become costlier by at least one percent while no GST exists on loose wheat, flour, rice, pulses etc. “It is not an overall consumer friendly budget but rather it can be called situation friendly as the budget lacks any steps that can bring down food inflation,” he said.

He urged the government to take back the decision of GST hike by one percent immediately as it will trigger food inflation in many items. He recalled that Sharif’s party had promised it would not take any steps which would raise prices.

A ghee and cooking oil producer feared jump of at least Rs1.50 to Rs2 per kg in ghee price in view of one percent jump in GST. However, in cooking oil, the price hike may be more than Rs2 per kg due to imposition of Rs400 per ton duty on canola seed import and Rs1,000 per ton duty on locally produced oil like canola, rapeseed, mustard, etc.

As Ramadan starts from second week of next month, consumers will bear the burden of paying high prices in ghee and cooking as these items’ consumption rises sharply in the holy month.

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