The RGST or Reformed General Sales Tax has recently been enacted in Pakistan. A General Sales Tax or so-called Flat Tax is a tax applied to all (or most) items sold in a country, and often is used instead of, or to replace, a complicated system of varying taxes, tariffs, and surcharges placed on individual goods (Like U.S. taxes on liquor, cigarettes and gasoline, for example). A General Sales Tax that covers a broader range of goods (including foods, for example), can often be applied 'across the board' at a lower rate, yet still gain greater tax revenues. That is the theory in Pakistan, and for those proposing a U.S. Flat Tax. But a Flat Tax, in taxing such necessities as food and clothing, may fall much harder on the poor, who tend to spend a greater percentage of their income on such goods. Pakistan has enacted a 'Reformed' GST to replace an earlier version. Reportedly, its RGST of about 15% on most sales will replace a range of taxes and tariffs that varied from 17% to 25% on some goods, but will add a 15% tax to goods not previously taxed.
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