ISLAMABAD: The Federal Board of Revenue (FBR) has ruled out the possibility of any fresh tax amnesty scheme for contractors associated with the construction sector to boost the industry, pleading that the FBR could not sustain massive revenue loss of Rs200 billion every year.
During the proceedings of the Senate Standing Committee on Finance meeting, held here on Tuesday, the tax authorities informed that the FBR generate revenue of Rs200 billion from the contractors on an annual basis.
Committee members proposed that the withholding tax on contractors should be brought down from 7.5 percent to one percent and a general amnesty scheme should be provided for not asking questions about the source of income. It was argued that it would further boost the construction sector as the government had already announced the PM’s Construction Package, and asked the IMF for granting extension to it for three months. At the conclusion of the meeting, the FBR chairman told media that no such amnesty could be granted to anyone.
He said that it was asked to reduce tax on contractors from 7.5 percent to one percent but the government could not forego its Rs200 billion tax amount.
The FBR also indicated during the Senate panel meeting that the valuation rates of properties into 23 cities might be revised upward in order to collect tax on profit earned by Rs5 million within the stipulated time frame of four years period at time of disposal of land. To a query on valuation rates, FBR Chairman Asim Ahmed responded that the valuation rate notified by the FBR stood at 70 percent of market value.
Earlier, the representatives of real estate agents, Ahsan Malik and Sardar Tahir told the meeting that the government brought changes into the gain tax regime with the intention that the valuation rates notified by the FBR and the DC rates would be increased in July 2021.
They also asked for defining adventurer and habitual buyers of real estate into the income tax law.
The Senate panel rejected the FBR’s proposal for imposing a GST rate of 17 percent for jewelers in the budget. The Senate panel asked for increasing the Higher Education Commission (HEC)’s current budget to Rs120 billion for the next fiscal year 2021-22.
The HEC high ups informed the committee that they sought a current budget of Rs153 billion for providing salaries, perks, and other administrative expenses of universities, and the Ministry of Finance directed to rationalise the expenditures.
The HEC rationalised and sent out a demand of Rs120 billion but the government had just allocated Rs66.25 billion, so the HEC would not have sufficient funds in the next fiscal year to pay its obligations fully. The Senate panel also rejected the FBR proposal for imposing tax on domestic electricity bills exceeding Rs25,000 per month. The FBR explained that this tax would be imposed on those who would not exist on the Active Taxpayer List (ATL). The committee also rejected the FBR proposal to place sugar into third schedule and impose 17 percent sales tax.
Copyright Business Recorder, 2021
Comments
Comments are closed.