News Detail

new detail picture

Event Title: Meeting of the Senate Standing Committee on Finance Revenue and Economic Affairs held at Parliament House under the chairmanship of Senator Saleem Mandviwala on June 16, 2022 at Parliament House Islamabad.

Event Date: 2022-06-16

 Islamabad 16-06-2022: The Senate Standing Committee on Finance Revenue and Economic affairs met on the third consecutive day to finalize the Fiancé Bill 2022-2023. The Chairperson، National Tariff Commission briefed the committee in detail on the proposals included in the Finance Bill regarding tariffs. She said that changes have been made in the Finance Bill regarding rationalization of tariffs for packaging and dyes industry. Senator Anwar-ul-Haq Kakar said that the export of raw materials should be discouraged so that the supply of raw materials within the country could be increased and promote industrialization. FBR officials briefed the committee on tax exemptions on the import of bulletproof buses and special vehicles for the security of foreigners working on CPEC and major power projects. He said that such special vehicles could be imported only after the NOC of the Interior Ministry and only federal and provincial governments would be authorized to import such vehicles. FBR officials told the committee that now payments of over one million could only be made through digital means.  The purpose is to record financial transactions.

Dr. Shahzad Waseem, Leader of the Opposition in the Senate, expressed his deep concern over the absence of the relevant ministers from the proceedings of the committee. He said that non-participation of ministers in the proceedings of the committee was tantamount to contempt of the House. Minister of State for Finance Dr. Aisha Ghous Pasha joined the committee meeting and answered the questions of the members.  Leader of the Opposition Dr. Shahzad Waseem, quoting FATA / PATA, questioned that despite tax exemptions being given in these areas till 2023, notices are being sent to the people.  Chairman FBR replied that FATA / PATA has only income tax and sales tax exemption and notices have been sent with reference to federal excise duty. Dr. Ayesha Ghous Pasha while briefing the committee regarding Gain Tax said that the tax period on immovable property is being extended from four years to six years so that people's attention can be drawn from non-productive to productive investment in order to encourage industrialization.

The committee deferred the clauses related to individual exemptions for further deliberation in presence of the Finance Minister, Senator Farooq Hamid Naek was of the opinion that no one should be given exemptions as a matter of justice and was in favour of removal of individual exemptions, Senator Farooq Hamid Naek while expressing his point further said that Pakistan must be the only country which financial budget changes this rapidly and lamented the change of legislation with that of the changing governments. The exemption under international agreements was reviewed by the committee and recommended to omit the resident person solely by reason of the performance of services under the agreement. A new insertion in the exemption under international agreements will also give powers to the Federal Government to relax any rules and to provide for exemption on any grant in aid and development assistance. The FBR authorities while studying the special provisions relating to payment of tax through electricity connections apprised the committee that to broaden the tax net and facilitate small retailers fixed income tax is to be charged on electricity bill , through the provision of fix taxation the retailer will no longer be bound to declare its yearly turn over.

The committee regarding approval of non-profit status to entities appearing in table II of Clause (66) of Part 1 of the second schedule, reduced the time period to provide relaxation up to July 2024 by one year i-e., up till July 2023, while the amendment to provide for withdrawal of concession granted through income Tax (Amendment) Ordinance, 2022, re-characterisation of income and deductions  and the amendment in minimum tax on the income of certain person In order to check the misuse, carry forward of minimum tax in succeeding years which has been withdrawn was accepted. Furthermore the amendment on the salary paid to an employee which has enabled certain tax credits elimination as part of personal income tax reform was also accepted by the committee.

The committee also accepted the new insertion of 1DC and 1DD which will enable for withholding of tax at source on services provided by international money transfer operators and withholding of tax at source on services provided by card network companies and payment gateways. The committee was also apprised that the aforementioned newly inserted sections have been given final tax status on non-resident persons.

The committee was apprised that the new insertion of section 7 A will provide certain industries' undertakings brought under minimum tax regime on their import, to check misuse of import to raw material, was also accepted by the committee. The committee also endorsed the new insertion of disabling of mobile phones or mobile phone sims to enforce filing of returns. The FBR authorities informed the committee that the FBR places penalty of 0.1 pc for each day after the due date for the filing of tax.

The business community also participated in the committee and forwarded their proposals to reduce prices on edible items by exemption of taxes in order to give sigh of relief to the general public. The representative of the Bakers and Sweets Association proposed to exempt the 17 pc sales tax earlier implemented on bakery items and sweets as the most commonly used edible for all the classes of society who has to pay an additional 9.5 pc tax, the matter was referred to the anomaly committee for consideration of proposal. The committee also recommended imposing 20 pc taxes on sugary beverages juices implying that it is injurious to health.  The jewellers community also made appearance and requested to consider the appeal by jewellers for resolution of issues emanating from finance Bill 2022-23 including withholding tax to be charges 1 pc instead of existing 9 pc on purchases of jewellers so that the value chain can be documented and lack of legally available raw material due to ambiguity in Import Police Order and high cost of duties and taxes
The meeting was deferred to meet again tomorrow at 2:30 pm.

Senators, Farooq Hamid Naek, Talha Mehmood, Anwar Ul Haq Kakar, Dilawar Khan, Dr. Shahzad Waseem, Zeeshan Khanzada, Minister of State on Finance, Dr. Aisha Ghous Pasha, Chairman FBR, Chairperson NTC, Officials from Ministry of Finance and Law were in attendance.