ISLAMABAD: The Senate Standing Committee on Finance on Monday asked top officials of the Federal Board of Revenue (FBR) to rework tax slabs for the individuals including salaried class before finalising its recommendations for the 2018-19 budget.

Most of the senators were not happy with the massive reduction in the tax slab for affluent individuals with higher incomes, which was proposed to be brought down to 15pc from 35pc.

The committee, headed by Farooq Hamid Naek, asked the FBR to revisit the impact of revenue while making changes in the taxable slabs for the individuals. FBR officials will brief the committee on Tuesday on various options.

Former secretary finance Dr Waqar Masood, who was invited to assist the committee on the tax related matters, suggested revising the proposed exemption threshold from Rs1.2 million to Rs800,000 for the individuals on the lower side while in the case of higher income individuals the proposed rates should be revised upward to 30pc from 15pc.Another important issue was the revalidation of the previous acts of the FBR exercised under various statutory regulatory orders (SROs). The committee extended legal covers to validate the SROs.

The committee unanimously validated the previous acts — issuance of notifications and orders of the directorate of intelligence and investigation of Inland Revenue. The recommendations will provide legal cover to orders passed, notices issued and actions taken in exercise of power.

The FBR proposal to share information with the National Database and Registration Authority was approved which will help the board in developing profiles of individuals.

Senator Ateeq Shaikh proposed raising of threshold for cash withdrawal from Rs50,000 to Rs100,000. However, the committee rejected the proposal seeking details of individuals in bank accounts.

The committee recommended to exempt purchase of new cars up to 1,000cc and 10-marla residential plots from the condition of tax filer. However, tax filing condition was made mandatory in the case of commercial property.

The committee also rejected the proposal seeking 1pc withholding tax deduction on debit cards. It was proposed in the budget to impose a levy on mobile phone. However, the committee was not satisfied with the explanation of the FBR officials and recommended to withdraw it.

The committee also proposed amendments in the tax rates for different products.

Published in Dawn, May 8th, 2018