Tuesday, July 31, 2018

Moody's : GST rate cut credit negative

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International rating agency Moody’s says that the recent Goods and Services Tax  rate cuts on 88 items will weigh on government’s revenue collection and is ‘credit negative’ as it will put pressure on efforts of fiscal consolidation.

According to Moody's estimate revenue loss from the most recent tax cuts to be about 0.04%-0.08% of GDP annually. Although the proportion of revenue loss is small, the vacillation in tax rates creates uncertainty around government revenue and comes amid persistent upside risks to its expenditures.

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