Senate body rejects many budgetary proposals

Published June 18, 2021
Continuing discussion on the Finance Bill 2021 for the third-day, committee members rejected the proposal of withholding tax on non-filers’ electricity bills exceeding Rs25,000 per month. — APP/File
Continuing discussion on the Finance Bill 2021 for the third-day, committee members rejected the proposal of withholding tax on non-filers’ electricity bills exceeding Rs25,000 per month. — APP/File

ISLAMABAD: The Senate Standing Committee on Finance on Thursday rejected the government proposals to tax markup on Provident Fund (PF), lowering of benchmark for charging withholding tax on electricity bills and declaration of business account.

The committee, led by its chairman Senator Talha Mehmood, approved the tax machinery’s proposal to abolish tax exemption on pensions and allowances of government employees.

Continuing discussion on the Finance Bill 2021 for the third-day, committee members rejected the proposal of withholding tax on non-filers’ electricity bills exceeding Rs25,000 per month.

Similarly, the recommendation of tax on markup of more than Rs500,000 for PF was also rejected.

Senator Mehmood said the declaration of business bank account will create problems. Senator Farooq Naik said that punishment and fine should be imposed for intentional concealment of business bank. The committee did not approve this proposal of the government. The minimum fine will be Rs0.1 million and imprisonment.

The committee summoned officials of the Ministry of Industries and Production and Engineering Development Board on reduction of taxes on vehicles up to 850cc.

Senator Saleem Mandiwalla said Pakistan was a country that produced the most expensive cars and a poor man could not even think of buying a car.

“There is no mechanism for car prices here. Even today, there is no complete production of vehicles at the local level,” he said.

Senator Mohsin Aziz commented that car manufacturers have been playing with this country for 20 years.

Senator Naik and other members expressed their displeasure when representatives of various businesses approached the committee seeking tax exemptions. He said the salaried class and common people were contributing maximum taxes.

On the occasion, the Federal Board of Revenue (FBR) briefed the committee that exemptions on corporate sector were withdrawn in line with the recommendations of the International Monetary Fund. It was further said that the government will abolish tax on import of point-of-sale machines and these accessible to retailers for duty-free import.

Similarly, duty will be exempted on the import of card reader machine (used for credit/debit cards) and banks will be allowed duty-free imports.

The committee decided to summon the Drug Regulatory Authority of Pakistan on the issue of medicines prices to get an assurance that reduction in duty on raw materials would result in decrease of pharmaceutical rates.

On the issue of the 2019 tax amnesty scheme and people who were unable to pay the fourth installment, Senator Naik suggested to make an amendment in the Act to provide the facility.

The committee unanimously approved proposals to reduce duties on chemicals for food processing and change the duty structure to promote Euro-V vehicles in the country.

The committee approved capital gains tax on property, tax on gifts to blood relatives and tax exemption on transfer of inherited property.

It further okayed tax rebate on turnover of Rs400 million, to investigate income and assets for non-resident Pakistanis, option of electronic appeals, to issue tax exemption to companies within 15 days, 1pc tax on export of services, to maintain 4pc super tax on banks and tax on cars’ on-money.

Published in Dawn, June 18th, 2021

Follow Dawn Business on Twitter, LinkedIn, Instagram and Facebook for insights on business, finance and tech from Pakistan and across the world.

Opinion

Editorial

Wheat price crash
Updated 20 May, 2024

Wheat price crash

What the government has done to Punjab’s smallholder wheat growers by staying out of the market amid crashing prices is deplorable.
Afghan corruption
20 May, 2024

Afghan corruption

AMONGST the reasons that the Afghan Taliban marched into Kabul in August 2021 without any resistance to speak of ...
Volleyball triumph
20 May, 2024

Volleyball triumph

IN the last week, while Pakistan’s cricket team savoured a come-from-behind T20 series victory against Ireland,...
Border clashes
19 May, 2024

Border clashes

THE Pakistan-Afghanistan frontier has witnessed another series of flare-ups, this time in the Kurram tribal district...
Penalising the dutiful
19 May, 2024

Penalising the dutiful

DOES the government feel no remorse in burdening honest citizens with the cost of its own ineptitude? With the ...
Students in Kyrgyzstan
Updated 19 May, 2024

Students in Kyrgyzstan

The govt ought to take a direct approach comprising convincing communication with the students and Kyrgyz authorities.