A ruling party's senator, Nuzhat Sadeq, played a decisive role in blocking a proposal to tax Rs 500,000/vehicle on all luxury vehicles of 2000cc and above. Senator Humayun Khan Mandokhel, Fateh Muhammad Hassani, Nuzhat Sadeq and Kulsoom Perveen opposed the proposal of Senator Tahir Mashhadi to taxing luxury vehicles during the meeting of Senate's Standing Committee of Finance, which held here with Senator Nasreen Jalil in the chair.
Senators Sughra Imam, Usman Saifullah and Nasreen Jalil supported the proposal. Federal Board of Revenue (FBR) argued that it would welcome any proposal that can be helpful in mobilising revenue and broadening the tax base. Senator Sughra Iman and Usman Saifullah urged fellow senators to support the proposal as those who can afford Rs 15 to 20 million luxury vehicle can also afford to pay the proposed tax.
Sughra Imam said that the FBR was giving particular concession to stock market community, which was evident from nominal increase to 12.5 percent in Capital Gain Tax instead of 17.5 percent agreed in 2010. Nasreen Jalil recommended the government to release Rs 6 billion to Khyber Pakhtunkhwa - the capped amount of net hydel profit that has yet to be released to KPK included Rs 6 billion for 2013-14 and Rs 3 billion for the last two quarters of 2012-13. This proposal was moved by Senator Haji Adeel.
Secretary Finance Dr Waqar Masood said that as stated by Finance Minster Ishaq Dar before the committee meeting on opening day, the government would not recover circular debt by raising tariffs. He said that relevant ministries were going to start a recovery drive to recover outstanding amounts equivalent to the circular debt. He added that tariff differential subsidy is not part of the circular debt. The committee also recommended that actual expenditures of last two years must also be reflected in the budget in brief so as to make it easer for everyone to understand.