The Senate while totally rejecting increase in taxes and prices of commodities has recommended the National Assembly to impose restrictions on non-filers of income tax returns, bring sales tax on five export-oriented sectors to zero percent, increase values of immovable properties by 50 percent, freeze exchange rate at Rs 150 per one US dollar and abolish advance tax from subscribers of the mobile phones.
The Senate received a total of 171 proposals from the members which were referred to the Senate Standing Committee on Finance for consideration and report. Out of these recommendations, 101 have been accepted by the panel and forwarded to NA for review. As many as 48 proposals were withdrawn by their movers and 20 proposals were rejected by the Senate panel. The remaining two proposals have been categorised as provincial subjects (which means these proposals are unrelated to the Senate and can be taken up for review by the provincial assemblies concerned.)
Senate has totally rejected the increase in tax and prices of commodities, which are burdening and adversely affecting the common man. Some key recommendations of the Senate are as follow: The Senate has recommended to the NA that the dealers of fertilizers be allowed facility of exemption certificate through electronic system on their sales to the prescribed persons.
-- The Senate has recommended the NA that the proposed increase of 4.5 percent in the Finance Bill 2019 for ship breakers on the import of ships be brought at par with steel melters. * The sales tax should not be imposed on textile sector and their pending refund claims should be released at the earliest; however, the government should take steps to stop issuance of fake invoices.
-- Instead of giving state deductions selectively to the charitable organisations, amendment should be made in the Income Tax Ordinance, 2001, to give state deductions to all the registered charitable organisations across the board.
-- The exemptable income tax slabs for government servants and armed forces should be fixed from Rs 1,000,000 instead of Rs 600,000.
-- A simplified and fixed tax rate should be introduced on the turnover in order to promote economic activities and facilitate the traders.
-- The government should provide some relief to the salaried class by reducing rate of taxation on revised slabs.
-- The government should take measures for reduction in import of luxury items.
-- The tax rate for rental income should be reduced to 20 percent, tax rate on dividend income be reduced from 15 to 10 percent and 100 percent increase in tax withholding on supplies to non-filers and non-active taxpayers should be brought at par with the normal withholding tax rates.
-- After eliminating export oriented zero-rated input of 5 sectors (domestic sales), the government should announce concrete refund policy through banks instead of FBR on the lines of Bangladesh model.
-- The proposed change of definition of tax resident to include any person who has lived in Pakistan for 90 days, should be withdrawn.
-- The FED on vehicles less than 1000cc should be abolished as such vehicles are primarily used by lower middle class.
-- The State Bank of Pakistan should intervene to regulate the exchange rate for ensuring credibility and stability in economy and take measures to keep the policy rate up to 9% as well as keeping inflation under single digit.
-- Advance tax (WHT) on 5 marla house and all properties having value of less than 6 million should be exempted.
-- An exemption of sales tax for three years shall be granted to the brick kilns falling in PCT head 6901.1000 who are upgrading the production to the S/Z type environment friendly system. The Board shall prescribe rules for initiating criminal proceedings against any person, who wilfully and deliberately commits or omits an act which results in personal benefit and undue advantage to the concerned officer or person. Where proceedings have been directed to be initiated against the concerned officer or person, the matter shall be transferred to the intelligence and investigation agency for prosecution in accordance with the Customs Act, 1969.
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