Senate Standing Committee on Finance has decided to recommend reduction in the rate of general sales tax by one percent; withdrawal of additional sales tax rate from 1 to 2 percent and 12.5 percent increase in salaries of government employees. Chairman Senate Standing Committee on Finance Saleem Mandiviwalla told Business Recorder that the recommendations would be finalised Tuesday (today) and would be submitted to the Senate on Wednesday.
The committee also said to have cut short around 200 recommendations to 97 as some of them were clubbed together and some have been dropped. Although committee wanted to recommend that lower limit for taxable income in case of Super Tax be reduced from Rs.500 million to Rs.300 million, but Finance Minister has noted that the decrease in threshold would have a very nominal impact on revenue, he added.
The Tax Reform Bill was passed by the Senate in 2012 and was presented in the National Assembly in 2013. The government may reintroduce the Bill so that the country may benefit from the provisions of the same, committee recommended. The in-camera meeting of the Finance Committee, which recommended 12.5 per cent increase in government employees salaries against 15 per cent earlier agreed by the full committee, was attended by only around four to five members.
The full Senate Standing Committee meeting on Finance has recommended that the existing disparity in amount of pensions payable to old and new pensioners be removed. All pensioners be treated equally irrespective of their dates of retirement and respective pension.
Committee recommended that withholding tax on Internet usage may be removed as access to the Internet may be encouraged. It recommended that the maximum rate of GST including on POL products may be kept at 15%. Budgetary measures to broaden the tax net are insufficient. Retail centres in major urban centres, private hospitals and the doctors working therein, private schools, beauty salons, guesthouses etc may be required by law to file income tax returns.
Lowest Slab for A1 General Tariff for Residential consumers may be increased from 50 units to 150 units. It recommended that FED on cigarettes may be increased from 58 to 75%, as cigarettes are extremely harmful to the health of citizen. It recommended that it is a great injustice that only Rs 16 billion have been allocated to Karachi which contributes 65-70% to the national exchequer of Pakistan. It recommended that the elimination of petroleum levy.
It recommended that the abolition of sales tax on gas, electricity and petrol to provide relieve to the masses. It recommended that a special package of Rs. 10 billion to revive Karachi''s infrastructure and boost development be made. The Senate recommends that no reduction or reallocation be made in the approved development budget without prior approval of the Parliament. It recommended that the Ministry of Finance may present broad parameters of the Budget in March every year and detailed budget by mid May every year in both Houses of the Parliament for pre-budget discussion.
It recommended that midyear budget review may be made mandatory and should be done each year in the month of February in Parliament for purposeful discussion and input. It recommended that all international loans and economic agreements may be placed before Parliament for information. It recommended that in order to promote industrialisation, the Federal Government may announce subsidised long term fixed mark-up loans to set-up new industrial units in the country to promote industrialisation.
It recommended that the Government may promote through special incentives the establishment of value added and labour intensive industry in the country. It recommended that the Government may adopt austerity measures, reduce non-development expenditure and eliminate VIP and VVIP cultures. It recommended that the Government may allocate appropriate funds from BISF for un-employed youth women and old citizens also. The Government should arrange an external independent audit and recipients'' verification of BISF immediately in order to ensure transparency and to eliminate undeserved/non-qualified recipients.
It recommended that no supplementary grant involving expenditure over and above 5% of the amount sanctioned in the budget be made without prior approval of the Parliament. It recommended that instead of huge allocations for the administrative and other expenditures on the staff and facilities in the Pakistani Missions abroad in the name of community welfare, separate and enhanced allocation may be made for concrete projects for the welfare of the Pakistani community living abroad including community centres and legal aid centres.
It recommended that concrete scheme for private sector with necessary incentives may be introduced for installation of solar and wind energy projects on self finance basis. It recommended that frequent floods and incessant rainfall have completely devastated upper and lower parts of the Province of Sindh, leading to an acute shortage of Capital to the farmers, due to the destruction of crops. As such it is recommended that the Federal Government direct the State Bank of Pakistan to issue instructions for making credit available to farmers in Sindh on low interest rate.
It recommended that the Federal Government should only fund those projects under PSDP which fall in the Federal Legislative List. Projects that fall in the domain of Local or Provincial Governments should not be funded from PSDP and all such savings should be diverted towards Energy Sector in order to reduce the load shedding. It recommended that a single "Energy Ministry" be created by merging different Federal Ministries dealing with energy subject, in order to fast track actions against ongoing issues relating to energy. It recommended that the incomes from all sources including from agricultural produce may be brought under the tax net so as to generate revenue for sustainable economic development. The proposal pending with Council of Common Interest with regard to uniform tax on agricultural income be finalised.
It recommended that the ongoing menace of circular debt may be brought to an end on urgent basis in order to deal with ongoing energy shortage. It recommended that the Federal Government may remove injustices and discrimination in the taxation system for optimal utilisation of available resources. It recommended that the Federal Government may introduce reforms to establish good governance, curb corruption, collect taxes efficiently and plug leakages so as to broaden the tax base.
It recommended that the Federal Government may take immediate measures to plug leakages and corruption in Public Sector enterprises in order t eliminate the current annual losses of around Rs.500 billion. The committee recommended that the Federal Government may introduce appropriate reforms in FBR in order to curb the reported leakages and corruption.
It recommended that the Federal Government may stop forthwith load shedding of gas and electricity for industrial units. It recommended that Government may promote agriculture reforms in order to incentivise small farmers and rural women, encourage co-operative farming and distribute state land among landless peasants. The committee recommended that the Government may promote micro financing and venture financing.
It recommended that the Government may promote the establishment of small and medium enterprises and patronise domestic and agro based industry in the country. It recommended that in view of the recent record of huge gaps between targets set and results achieved in revenue collection, the government should set realistic targets and then hold the FBR responsible for underperformance.
It recommended that subsidies to State Owned Enterprises (SOEs) be reduced by at least 10% and the amount may be diverted to the power sector to provide immediate relief to the people of Pakistan and the government must consider making set Rules for restructuring of SOEs.
It recommended that the budgetary proposals, especially the PSDP/annual plan is presented to the concerned Committee of both Houses at least three weeks before laying the budget in the House. Ideally all Legislators should be given sufficient time and details to make recommendations but the Senate Standing Committee which is tasked to make recommendations within 10 days needs more time and a detailed briefing for useful and practical recommendation. It recommended that PSDP allocations should be prioritised on the basis of national economic and strategic importance as well as balanced development in all Provinces and Regions
It recommended that subsidies to be enhanced for the tube wells in Balochistan. It recommended that trade deficit may be reduced by increasing exports and decreasing import of luxury items so that import bill to be reduced to the maximum extent. It recommended that the Federal Government should make announcement in this Annual Budget 2015-2016 a special scheme for sending FATA Youth in Middle East, South Korea and Malaysia for employment.
It recommended that all discretionary power and funds for everyone to whom Government pay from national kitty may be audited. It recommended that Income from all sources salaries, businesses, property and agricultural produce above the taxable limit may be taxed.
It recommended that tax on sales/purchases of all sort of properties i.e. urban, rural, commercial, industrial and agricultural should be collected. It recommended that the Land owners of Balochistan should be given subsidy on agriculture. It recommended that import of five year reconditioned/old cars may be allowed.
It recommended that the government grant approval for installation of 2000 Tube wells for the land owners of Balochistan to reduce backwardness in Balochistan. It recommended that immediate and dedicated work should be started on the pending agreements of Pakistan-Iran on Natural Gas and Electricity projects. It recommended that for the social welfare of all minorities in Pakistan sufficient allocation of funds should be allocated.
It recommended that a country wide programme be launched to train farmers to shift from traditional tilling and harvesting ways to mechanised farming and for this purpose an initial amount of Rs 500 million be allocated. It recommended that huge number of livestock in the provinces of Sindh and Balochistan got lost during draughts/flood etc. Fifty Crore rupees be allocated to provide interest free loan to the rural people who have lose their only source of income, so that they can reimburse their stock.
It recommended that a substantial amount of funds be allocated to solve soil related problems like depleting, soil fertility, soil erosion, water logging and salinity to enhance crop yield. It recommended that training may be imparted to the farmers for effective and efficient use of irrigation water. Lowering of water level is very serious issue of the Province of Balochistan. Experts have alarmed that we are fast becoming water starved countries/may face water emergency by 2020. Hence sufficient funds be allocated for efficient water management, utilisation and improvement of water harvesting techniques in the province of Balochistan and Desert areas of Sindh.
It recommended that Federal Government should make announcement in this Annual Budget 2015-2016 a special scheme for granting soft loan to FATA Youth for the fruit orchards and animal farms. It recommended that PSDP should be reviewed and re-appropriated according to Article 156(2) of the Constitution of the Islamic Republic of Pakistan in order to make appropriate allocation for completing the started projects in Balochistan, Sindh and Khyber Pakhtunkhwa.
It recommended that ten thousand jobs may be provided to the educated youth of the province of Balochistan. It recommended that agricultural tube well subsidy may be enhanced for the province of Balochistan. It recommended that mark-up due for the agricultural loan payable by all flood affectees of the country may be written off. It recommended that justice be done to city of Karachi which contributes over 65% of the Revenue. It is recommended that at least 15% of the budget should be allocated to Karachi as it is Pakistan''s most important commercial, industrial city and engine of growth for the country.
Comments
Comments are closed.