The Senate Finance Committee on Wednesday decided to hold Pre-budget meetings along with all the relevant stake holders in order to restart the declining economy of the country. Senator Saadia Abbasi recommended to hold meetings calling upon all the stake holders and hear their suggestions and concerns to be incorporated in the upcoming budget. The committee endorsed this view point and the meetings are likely to be commenced from next week.
Earlier in the meeting the point of public importance raised by Senator Rana Mehmood Ul Hassan regarding sugar smuggling was disposed of. It was observed that the member concerned has not shown attendance twice besides, ample discussions has been made on smuggling and the Prime Minister has also taken initiative on the same, therefore the matter was disposed of.
Briefing by the SECP on media reports regarding proposed amendments to Non-Banking Finance Companies and Notified Entities Regulations proposing to increase its fees on AMC’s by over 350 % to the original level, which was reduced after detailed deliberations by SECP policy board in FY 20 was also taken up. The SECP officials said that there is no media reports in their knowledge. It was briefed that the policy board has the power and mandate to specify fees chargeable by the SECP and SECP implements the fees as approved by the policy board. It was briefed that the policy board of the SECP along with other private members comprises of Secretary Finance Division, Secretary Law, Secretary Commerce and Deputy Governor State Bank who are permanent members. It was apprised that the rates of fees have been revised to the level of 2019 after detailed deliberation and careful analysis in the Financial position and autonomy of SECP . “ It is not an increase but a reversion” the official remarked and said that the amendments have been made after detailed deliberation with industry stake holders including MUFAP. It was also debated that SECP is only charging annual fee from mutual funds whereas in other jurisdictions multiple fee including approval of funds, registration of fund, annual fees, filing fees are also imposed.
The committee while taking briefing on the crypto currency debated that may be some momentary speculative gains be associated with crypto currency trading but there are no substantial National-level economic benefits. The SBP official said that keeping in view number of frauds reported through crypto currency including USD 2 billion fraud in turkey by an exchange named Thodex, and losses of 650 billion dollars , the second largest crypto exchange bankruptcy in November 2022. the SBP in 2018 prohibited its regulated entities from dealing virtual crypto currency. The committee emphasised that digital financing should be banned and penalties should be imposed. It was also stressed that legislation should be framed and given a legal enforcement.
While taking briefing by the FBR on the capital Value tax on local and foreign assets of taxpayers introduced in the Finance Act 2022. It was briefed that CVT is levied on foreign assets of resident individuals exceeding rps 100M in value, and motor vehicles exceeding battery power of 1300 cc/ 50 kWh similarly the value of assets to be determined in case of foreign assets is the total cost of foreign assets on the last day of the tax year converted into Pakistan Rs at SBP notified exchange rate as on 30th June, 2022. It was briefed that collection of CVT of rps 3,194 M and 6,045 M from foreign assets has been made since the operationalising of this law. It was briefed that as a result of tax policy shift the direct tax collection has for the first time surpassed all individual indirect taxes as direct tax (Income tax/CVT) 45%, Sales tax 42 % and custom duty 13 pc. Senator Dilawar khan recommended direct tax collection at district level and said it will give fruitful results. Aisha Ghaus Pasha State Minister for Finance said that this has been tried earlier but was not workable. The Chairman Committee called for an in camera meeting to take briefing on all such regimes and its implementation mechanism.
Briefing was also taken on the delay in implementation of the decision of the Finance Committee by Ministry of Finance regarding additional PSDP demand for project protection and upgradation of Pak-China OFC project for establishment of cross border connectivity (Dassi-Danyore alignment). Senator Umer Farooq regretted that new projects are being funded whereas projects near to completion are not allocated funds. The committee lamented the mismanagement and mysterious working of the ministry of IT & T and the planning commission on the allocation of funds and its disbursement. The chairman committee reiterated the release of funds of 608 M rupees in order to close the project. The committee sought report on the same from the IT ministry.
The committee also took detailed briefing on the fraudulent activities and financial mismanagement occurring on the name of Dr. Abdul Qadeer khan trust hospital. The committee after taking briefing observed that it is a private dispute regarding a trust property comprising of 6 other share holders and the matter is also subjudice in the courts however the committee keeping in view the dignity and honour of Dr Abdul Qadir recommended to hold meetings between all the share holders on the financial dispute and come to an amicable solution. It was recommended by Senator Farooq Hamid Naek that letters can also be written to the IG police and FIA to look into the matter pertaining to fraud and mismanagement of funds.
The meeting was attended by Senators Farooq Hamid Naek, Saadia Abassi, Kamil Ali Agha, Umer Farooq and Dilawar Khan. State Minister for Finance Aisha Ghaus Pasha, Chairman FBR, Member customs FBR and officials from SECP and ministries of Finance and Revenue and IT were also in attendance.