ISLAMABAD: The Senate Standing Committee on Finance expressed serious concern over the exaggerated tax demands of Rs 1,500 billion raised against the taxpayers, particularly the business community during the last one and a half months.

During the review of the Finance Bill 2021-22, Committee chairman Senator Talha Mahmood noted with serious concern the exaggerated tax demands raised against the business community.

He was also concerned over the issuance of notices to the business community on one pretext or another. If the tax liability of a taxpayer is Rs 5 crore, the tax official made exaggerated tax demand of Rs 50 crore.

Through this method of raising tax demands, the FBR has sought tax over Rs1.5 trillion from the taxpayers by increasing the tax demands as compared to the low actual tax liability, Talha added.

The committee was displeased the way the business community was being treated by the Federal Board of Revenue (FBR) and the National Accountability Bureau (NAB). The committee chairman regretted that the FBR has issued tax notices worth Rs1,500 billion in the last one and a half months.

Similarly, the tax notices worth Rs65 crore were sent to traders with annual turnover of Rs5 crore, added the chairman and stated that the committee would not ignore this kind of attitude with the business community.

He said that action should also be taken against those who deliberately send wrong notices.

The committee sought details of all notices from the FBR by July 15, 2021.

The committee also expressed concern over the NAB.

“We will call FBR on the issuance of notices after the budget,” the chairman of the Finance Committee added.

The meeting of the Senate Standing Committee on Finance has vehemently opposed increase in taxes on edible oil and ghee, and stated that increase would fuel inflation in the country and would make the life of the people more difficult.

This was stated by the senators during a meeting of the senate standing committee on finance that has been discussing the Finance Bill 2021 for over a week to suggest recommendations to it.

They voiced serious concern over the revenue collection budget on account of petroleum levy, and stated that increase in petroleum levy and tax rates on edible oil and ghee would stoke inflation in the country.

This, according to them, the proposals in the Finance Bill to bring people in the tax net appear to be inappropriate as the entire burden of increase in taxes would be passed on to the consumers.

Senator Kamil Ali Agha stated that the responsibility lies with the government to provide relief to the people on food items.

Senator Sherry Rehman said the government has projected Rs600 billion revenue through petroleum levy, which means increase of Rs20 per litre on petroleum products.

This would fuel inflation in the country and would make the life of the poor more miserable, she said adding that prices of gas and petroleum are being increased.

Members of the committee stated that the prices of commodities have already started increasing even before the approval of budget from the parliament and Rs 97 is expected to be increased on 20kg flour bag.

She said that all the matters including agreement with the International Monetary Fund (IMF) should be placed before the parliament.

The committee also expressed serious reservation over power being given to Custom Collectorate in the finance bill as it can use suo moto power in any matter.

The committee decided to put the matter off till today (Tuesday).

Secretary Board of Investment (BOI), in response to the question of the committee chairman, stated that China had to convince its companies to relocate in the special economic zones and Chinese companies are yet to invest in the SEZs.

He added that duty-free import of plants and machinery has been allowed for special economic zones.

The committee was further told that special technology zones, duty-free import of raw material and machinery is also allowed.

The secretary BOI said the BoI chairman has resigned and the cabinet would approve his resignation.

In response to the questions of senators that was he the fourth chairman of the current government who has resigned during the last three years, the secretary responded that he was the third one.

The committee members have also expressed concern over approval of the annual budget without having the new National Finance Commission (NFC) as this was a violation of the Constitution, so stated Senator Kamran Murtaza.

There should have been at least an interim NFC award before the new budget, he added.

Senator Mandviwalla said successive governments have been violating the NFC.

The Senate Standing Committee on Finance has recommended to the government that annual salary up to Rs12 million should be exempted from tax, and regretted that in the finance bill for the next fiscal year tax exemption has been withdrawn on medical and special allowances of the employees.

Copyright Business Recorder, 2021