PPPP presents 25 proposals

Pakistan People's Party Parliamentarian (PPP) proposed withdrawal of federal excise duty on financial services, one percent increase in sales tax rate, 2 percent further tax on supplies to un-registered persons, withdrawal of 0.5 percent Income Support Levy and stripping Federal Board of Revenue (FBR) of the powers to access bank's central database through Finance Bill (2013-14).
The PPPP has also proposed measures for documentation of economy including mandatory sales tax registration under the Sales Tax Act, 1990 for all persons making payments against supply of taxable goods. Addressing a news conference here on Monday at Parliament House, PPPP Parliamentary Leader in Senate, Mian Raza Rabbani, said that his party had proposed as many as 25 budget recommendations.
"Federal budget 2013-14 is a slap on the provincial autonomy and against the sprit of 18th Constitutional Amendment," he asserted. According to the proposals of the PPPP: (1) the increase in the standard rate of sales tax from 16 percent to 17 percent should be withdrawn.
(2) Imposition of GST on milk products including packaged milk, which is a hygienic alternative to loose milk and an everyday item of consumption by many household, should be withdrawn or the rate be reduced. (3) Differential in rates of sales tax creates incentives for evasion. The concept of further tax on supplies from and sales to unregistered persons will increase the arbitrage within the system with fake companies being formed to benefit from the 2 percent arbitrage. Instead it is proposed to make registration under Sales Tax Act compulsory for all persons making payments against supply of taxable goods.
(4) The Finance Bill has proposed advance tax collection at the rate of 0.5 percent under section 236H. This may be increased to 1 percentto bring it in line with minimum tax rates for manufacturers. (5)The Finance Bill proposes to require banks to make arrangements to provide the FBR with online access to their central databases. It is proposed that this provision be withdrawn pending reform of FBR to ensure privacy and data integrity and to protect against coercion and corruption. Insertion of clause 25 in the Finance Bill, 2013 may be withdrawn.
(6) Finance Bill has proposed that the parameters for selection of audit through computer balloting by the FBR shall remain confidential. This is against the principle that the tax system should be fair, transparent and easy to understand. Taxpayers are entitled to know what the parameters for selection of audit through computer balloting are. FBR must make these public.
(7) Finance Bill has proposed to reduce minimum tax liability of those persons engaged in the distribution of cigarettes, and cigarette smoking has scientifically been proven to be injurious to health. The proposed changes may be withdrawn. (8) The Medium Term Budgetary Statement presented as part of the Federal Budget includes three-year rolling targets for macroeconomic indicators. In order to encourage broadening of the tax base, targets for number of taxpayers filing income tax returns may also be set.
(9) A pre-budget session of the Parliament should be held at least one month before the actual budget is presented in Parliament, in which all budgetary proposals are placed before the Parliament. (10) The budget of each Ministry should be placed before the respective Standing Committees of the Parliament, at least six weeks before the Budget session.
(11) A comprehensive national policy for Pakistan's food security, agriculture and research development must be framed and included in both the Government's economic vision and medium term budgetary statement, detailing concrete incentives, measures and interventions for the sector.
(12) Uncertain external revenues (eg the anticipated revenues expected from auction of 3G License, Coalition Support Fund, outstanding dues from Etislat) should not be included in the revenue receipts of the annual budget. (13) Only those projects should be included in the PSDP that have undergone a pre-project economic appraisal, an environmental impact assessment and a cost benefit analysis.
(14) The block allocation of Rs 115 billion in the PSDP for development initiatives should not be included without specifying approved projects. Only approved projects should be included in the Budget. (15) The 30 percent expenditure cut in all Ministries announced by the Prime Minister must be reflected in the allocated Current Expenditures of the Budget. (16) Distortions in the income tax regime must be rationalised, especially in the case of the capital gain tax.
(17) PSDP allocations should be prioritised on the basis of national economic and strategic importance as well as balanced development in all Provinces and Regions. (18) All those clauses presented in the Finance Bill, 2013 to reward and reform tax officials should be dropped. (19) All those sections and clauses included in the Finance Bill, 2013 that are not under the purview of a money bill should be dropped.
(20) Federal Excise duties levied on services should be withdrawn. (21) Income support levy should either be withdrawn or amended as a tax, so that revenues collected to go the Federal Divisible pool. (22) Allocations for Health and Education projects that are the Constitutional responsibility of the Provinces should be dropped. (23) Minimum wage should be 12,000 rupees.
(24) The amendments relating to the sales tax for goods manufactured or produced in various districts of KPK as well as in FATA may be withdrawn. These areas, being severely underdeveloped and disadvantaged may continue to enjoy exemption from sales tax. (25) The Finance Bill seeks to propose certain amendments for salary taxation. The proposed amendments are regressive in nature, for example those with gross salary incomes of Rs 600,000 will see their tax liability increase by 25 percent while those with salary of Rs 4,000,000 will see their tax incidence reduce by 18.4 percent. These amendments may be withdrawn.
Raza Rabbani said that the federal budget 2013-14 was for elite class or business tycoons and to promote capitalists in the country. He added that the budget was anti-worker, anti-people and anti-middle and lower class. He further said that the wages of labourers must be increased to Rs 12,000 and salaries and pensions should be increased up to 25 percent. Senator Rabbani alleged that Rs 115bn had been secretly reserved for Prime Minister Nawaz Sharif's discretionary funds.