Govt mulls cutting GST to 5% to increase essential commodity consumption
Hafeez Sheikh said that deferred debt payments to G20 countries would provide relief of $1.8 billion
ISLAMABAD (Dunya News) - Finance Advisor Abdul Hafeez Sheikh chaired a meeting to assess the economic impact of coronavirus in the country during which a proposal to reduce GST from 17% to 5%, with the aim to increase consumption of essential commodities, was considered.
Proposals to reduce the risk of economic downturn caused by the coronavirus were reviewed, with special cell members proposing measures for banking, finance and other sectors.
Moreover, the need and scope of a bailout package for major businesses and exporters, promotion of SMEs and food prices were also reviewed during the meeting.
In the meeting, Finance Advisor Hafeez Sheikh briefed about the current situation of debt relief expected from G20 countries. He said that deferred debt payments to G20 countries would provide relief worth $1.8 billion and that IMF has provided $1.4 billion to combat the coronavirus.
During the meeting, the members proposed to review further reduction of the policy rate due to reduction of oil prices in the global market. The meeting also reviewed various proposals regarding agricultural loans and increasing remittances.
Moreover, in order to increase the consumption of essential commodities, it was proposed to reduce GST from 17% to 5%, which is now under consideration. The meeting also discussed the shortfall in FBR revenue due to coronavirus.
