Consumers will bear the brunt of the new VAT rate
A 15 percent flat VAT rate on 4,800 consumer products will limit our purchasing power. Production of some local products may also collapse because of competition from cheaper alternatives from India.
It is the mutual responsibility of the NBR and the registered businessmen to help the government collect tax. But according to the Finance Minister, 32,000 of the 8 lakh registered firms in the country submit VAT returns far below expectations. Instead of imposing a flat VAT rate on all products, the government should help the NBR plug the loopholes in VAT regulations and bring to justice the businesses that avoid paying taxes. The government should first take care of the existing issues in VAT collection before implementing a blanket policy that will affect most strongly the general consumers.