ISLAMABAD: While criticising the Federal Board of Revenue (FBR) and the government for imposing heavy indirect taxes on essential items, the Senate’s Standing Committee on Finance on Wednesday unanimously recommended that the government waive 17 per cent sales tax on domestic consumers.

A meeting of the committee presided over by Senator Saleem Mandviwala was informed that general sales tax (GST) was being charged at the rate of 17pc from all consumers. Earlier, GST was charged at a rate of 16pc and 1pc was increased from July 2013.

FBR officials told the committee that extra tax was being charged from commercial and industrial consumers not registered in the board’s active taxpayers list at the rate of 5pc if the amount exceeds Rs15,000 per month from July 2013. Another 1pc was being charged from all consumers having no Sales Tax Return Number (STRN), except for domestic and agricultural consumers, from October 2013. Sales tax was Rs7 per unit for steel melting and re-rolling from June 2014.

The committee was informed that from August 2014 sales tax was charged from retailers at the rate of 5pc if the billed amount was up to Rs20,000, and at 7.5pc if the billed amount exceeded Rs20,000.

Other surcharges levied by the government are: tariff rationalisation surcharge from October 2015 at the rate mentioned against categories of electricity consumers as specified in the schedule of electricity tariff for maintaining uniform rates; finance cost surcharge at the rate of Rs0.43 per kWh from October 2015 to all consumers, except lifeline consumers; and Neelum-Jhelum Surcharge on all A-1 consumers of electricity distribution companies, except lifeline consumers, at Rs0.10 per kWh till December 2016, which is specially being utilised to develop the Neelum-Jhelum hydropower project.

The committee was informed that the amount collected through these taxes/duties was being directly submitted to the FBR, as they were part of the government revenue.

Meanwhile, FBR Chairman Nisar Muhammad Khan acknowledged that indirect taxes were being passed on to the consumers.

Senator Tahir Mashhadi and Senator Kamil Ali Agha lashed out at the government and accused the authorities of over-billing electricity consumers and collecting taxes through electricity bills, as well as domestic consumers.

Published in Dawn, August 18th, 2016