The Senate Standing Committee on Finance, Revenue and Economic Affairs in its meeting held on Tuesday at Parliament House, discussed in detail the Bill titled “The Tax Laws, 2019, laid before the Senate under Article 73 of the Constitution and referred to the Committee on 4th March, 2020.
Chaired by Senator Farooq Hamid Naek, the meeting was attended by Senator Mian Muhammad Ateeq Shaikh, Senator Anwar ul Haq Kakar, Senator Imam-ud-Din Shouqeen, Senator Muhammad Akram and officers of the Ministry of Finance, Revenue and Economic Affairs and the Ministry of Law and Justice.
At the outset, the Chairman Committee inquired whether the said Bill deemed to be money Bill as provided in Article 73 (2) of the Constitution of Pakistan, 1973 or otherwise. Member (Customs), FBR responded that the said Bill contained the remission of taxes, therefore, it is a Money Bill as provided in Article 73 (2) (a) of the Constitution of Pakistan, 1973 which deals with the imposition, abolition, remission, alteration or regulation of any tax. He further informed that the Customs Act has already given concession to the equipments, materials, plant machinery imported by the concession holder, its operating companies and contractors and sub-contractors for forty years, however, now the words Gwadar International Terminal and Gwadar Marines Services Limited, their contractors and sub-contractors have been included. He further explained that these amendments have been moved after discussion and deliberation with the Ministry of Maritime Affairs and in consequence of concession agreement with the Chinese Government.
Chairman Committee, Senator Farooq Hamid Naek briefed the participants of the meeting regarding definition of the word remission given in the Black’s Law Dictionary. He read out the meaning of remission i.e. “A cancellation or extinguishment of all or part of a financial obligation”. He further was of the view that the amendments containing in the said Bill are not remission but these amendments are exemption of tax for forty years, whereby he read out the meaning of word exemption which means “Freedom from a duty, liability or other requirement”, therefore, the said Bill does not fall within the purview of Money Bill as it deals with the exemptions of taxes instead of remission of taxes, as provided in Article 73 (2) (a) respectively of the Constitution of Pakistan 1973.
While seeking views of the M/o Law about the definition of remission and exemption, the Committee expressed its displeasure for the absence of Secretary Law or any other senior officer not below the rank of an Additional Secretary. In response, Mr. Abid Ali, Deputy Draftsman, M/o Law said that Secretary Law could not attend the meeting due his preoccupations at High Court of Sindh. Regarding views on remission and exemption, he said that he is not prepared in this regard and is unable to explain the terms.
Senators Mohsin Aziz and Mian Muhammad Ateeq Shaikh were of the view that the exemption of tax should be project bound, material bound, contractor bound, it should be free for plants and equipments and specifically for the development of Gwadar Port. Senator Dilwar Khan was of view that the proposed exemptions in the said Bill could be misused as being misused in result of SRO.No.517 issued for the exemption of taxes in Gadoon Amazai.
After due deliberation, the Committee decided that the exemption is not a remission, therefore, the said Bill does not fall within the purview of Money Bill and therefore it unanimously recommended to the National Assembly that the Tax Laws (Amendment) Bill 2019, does not fall within the purview of Article 73 (2) of the Constitution, and may be withdrawn by Government and the same be brought under Article 70 of the Constitution of Pakistan 1973.