Finance Bill, Sec 233A of income tax law: Suggestions finalised by Senate body

ISLAMABAD: The Senate Standing Committee on Finance has finalised its recommendations to the Finance Bill, 2021-22, during an in-camera session of the meeting Wednesday.

It includes removal of 233A of the Income Tax Ordinance, 2001 that allows Inland Revenue officers of the Federal Board of Revenue (FBR) the powers to arrest. The meeting of the finance committee presided over by Senator Talha Mahmood would submit the recommendations to the Upper House, from where these would be transmitted to the National Assembly to make them part of the Finance Bill 2021-22.

Finance Minister Shaukat Tarin attended the in-camera meeting of the Senate Standing Committee of Finance and assured the members that the recommendations proposed by them would be incorporated in the Finance Bill 2012 as many as possible. He said that the Finance committee was an important platform for coordination between the government and the investors/traders. Earlier, Senator Talha Mahmood also sought time from Finance Minister Shaukat Tarin before finalising the proposals.

The Committee also recommended raise in the salaries of government employees from 10 to 20 percent during the next fiscal year. The Committee also rejected the imposition of tax on the expenses of the working class. The Committee also rejected inclusion of sugar in the Third Schedule; sales tax on gold/diamonds/precious stones; sales tax on dairy products, aircrafts, plants and machinery; withdrawal of exemption on LED lights; imposition of sales tax on 14 items of the poultry sector; and sales tax on bricks.

The Senate panel also rejected the FBR proposal for imposing tax on domestic electricity bills exceeding Rs25,000 per month. The committee also rejected the FBR’s proposal for imposing 17 percent sales tax on jewelers. The Senate panel also recommended to the government to raise FED plus Rs25 per pack on tier-1 cigarettes as it will generate additional Rs13 billion, while on tier-2 the FED plus Rs15 per pack should be increased to generate additional Rs50 billion.

The committee, unanimously, recommended that the collection under Export Development Fund (EDF) should be suspended for a period of three years. The Standing Committee approved the proposal to increase the holding tax of Karachi Chamber on exports to 0.5 percent instead of one percent and also to keep the customs duty of Karachi Chamber at 10 percent.

The committee also opposed increase in taxes on edible oil and ghee, and stated that increase would fuel inflation in the country to make the life of the people more difficult. The committee also opposed imposition of sales tax on milk after it was told that the price of milk would escalate and fuel inflation in the country.

The committee rejected increase in sales tax on poultry feed from 10 percent to 17 percent. The committee rejected 17 percent sales tax on poultry feed and recommended that sale should be maintained at existing rate of 10 percent. Committee members including Senator Mahmood strongly opposed imposition of 17 percent sales tax on crude oil. The Senate panel, unanimously, recommended that the prime minister honor the appeal of Pakistan Dairy Association (PDA) to restore zero-rating regime on milk and other 45 nutrition-based products as well as restoring previous sales tax of 10 percent on value-added dairy products.

Copyright Business Recorder, 2021