ISLAMABAD: Senators from both sides of the aisle took exception to some proposals of the recently tabled supplementary finance bill when the house standing committee on finance discussed its measures and listened to industry representatives on Thursday.

Most members of the Senate Standing Committee on Finance and Revenue agreed that the adverse effects of some measures on certain sectors should be mitigated.

PPP Senator Saleem Mandviwalla, who chairs the committee, assailed the government’s policies for imposing more taxes on the existing taxpayers. “Pakistan has become a paradise for non-taxpayers,” he lamented.

Mr Mandviwalla also disclosed that the aviation industry was not happy with a 20 per cent tax on first- and business-class air tickets.

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Senator Mohsin Aziz of PTI said that tax measures proposed in the supplementary finance bill, generally known as the mini-budget, would raise Rs510 billion instead of Rs170bn.

“I reject this budget through my party,” he said, adding that passing the bill would be disastrous, though he agreed that the government had to swallow this bitter pill.

He suggested that the import of luxury items should be banned instead of increasing tax on them because it would encourage smuggling.

Mr Aziz criticised the coalition government for continuing to appoint special assistants and state ministers “while the country is facing a financing crunch”. He added, “This is an area the government should focus on to reduce expenditure.”

On this, Minister of State for Finance Aisha Ghaus Pasha said the government was also thinking about it, and Prime Minister Shehbaz Sharif would soon give a plan in this regard.

She insisted that the finance ministry also intended to ban luxury imports but could not do so because of World Trade Organization’s restrictions.

Mr Mandviwalla apprised the committee that the aviation ministry had written a letter to the standing committee and expressed reservations on the 20pc federal excise duty (FED) proposed in the mini-budget for upper-class air travellers.

He suggested that instead of imposing a 20pc tax, a definite amount should be fixed for each destination.

Senator Saadia Abbasi of the PML-N rejected a provision of the finance bill that empowers the Federal Board of Revenue (FBR) to increase tax rates without seeking prior approval from parliament.

The FBR has raised the GST rate from 17pc to 18pc through a notification, while this power was earlier not available with the FBR. Representatives of Murree Brewery and Shezan companies informed the committee that the government had imposed a 10pc excise duty on sugary fruit juices and squashes, which was not justified.

FBR Chairman Asim Ahmed replied that sugary drinks were injurious to health and as per World Health Organisation’s recommendations, the government had also increased FED on carbonated water from 13pc to 20pc.

However, members of the Senate standing finance committee recommended that FED on fruit juices should be halved to 5pc.

Similarly, to curtail the usage of tobacco as per global practices, the government had increased the tax per 1,000 cigarettes from Rs6,500 to Rs16,500.

On the issue of taxing marriage halls, Mr Mandviwalla said most of them were not even registered with the FBR. Therefore, before imposing a tax, the government should first register marriage halls, he said.

Published in Dawn, February 17th, 2023