ISLAMABAD: The Senate Standing Committee on Finance rejected three major sales tax measures including a one-year extension in tax exemptions to the erstwhile tribal areas up to June 30, 2024, an increase in sales tax from 12 to 15 percent on supplies made by the point of sales (POS) retailers dealing in leather/ textile products, and sales tax on consumer goods sold under the brand names/ trademarks.
During the review of the Finance Bill, 2023, on Monday at the Parliament House, the committee, unanimously, rejected the exemption of sales tax on supplies and import of raw materials, plant and machinery and supply of electricity to the industrial units and consumers.
The minister of state and finance assured the committee to withdraw the amendment.
Rs223bn taxation measures taken
Similarly, taxes on the Eighth Schedule on POS retailers which are proposed to be enhanced from 12 per cent to 15 per cent has also been rejected unanimously by the committee stating that such enhancement is only encouraging the non-registered sector.
The committee also deferred the proposal of tax on the Sixth Schedule which says that any package which is under a brand name is chargeable. The committee failed to understand the reason behind this and recommended reviewing the proposal.
Similarly, the committee recommended reviewing the proposal of bill supply of consumer goods sold under the brand names or trademarks to be proposed to be taxed at 18 percent.
The matter of chargeability of the FED on goods and services specified was deferred for review; however, the FED proposed on royalty and fee for technical services in Table-II of the first schedule was accepted. It was apprised that the extension in exemption of sales tax to NMDs (Fata/Pata) for another one year ending 30-06-23 is given through the new budget.
The chairman of the committee said that it seems the one-year extension has been granted by the government under pressure.
The committee also deferred the proposal of tax on the Sixth Schedule which says that any package which is under a brand name is chargeable.
Meanwhile, FBR Chairman Asim Ahmed said that if the government is able to complete the ninth review of IMF then things would be improved a lot.
He also explained that the net revenue impact of new taxes is Rs200 billion as the government has proposed Rs23 billion relief.
Explaining the proposed taxation measures, the FBR chairman said that the government in budget has allowed overseas Pakistani to send 100,000 dollars to Pakistan. Basically, we have converted Rs10million amount into 100,000 dollars due to exchange rate.
Member Policy Customs briefed that Customs officials can now confiscate smuggled goods anywhere in Pakistan. The chairman committee questioned why Customs and other enforcement agencies cannot stop the smuggled items at the border points. Anyone can get the smuggled petroleum goods in Peshawar, he said, adding that this was available to the extent of Balochistan but now available in almost everywhere.
Copyright Business Recorder, 2023