Senate Standing Committee on Finance would finalise its recommendations for Finance Bill 2015 today (Monday) for onward submission to the Senate for approval as well as recommendation to the National Assembly for incorporating in next fiscal year budget.
A member of Senate Standing Committee on Finance told Business Recorder that the government would be urged to minimise reliance on the borrowing from the banking system as it was crowding out private sector. The committee members have recommended that the government must not borrow from the banking sector as massive borrowing was crowding out private sector. It was suggested that the government need to relay on National Savings Schemes and other government schemes. The committee members also proposed that Tax Reform Bill was passed by the Senate in 2012 and was presented in National Assembly in 2013. The Government may reintroduce the Bill so that country may benefit from the provisions of the same. The committee recommended that the Constitutional requirement for equity and balanced development amongst the federating units has not been adhered to in the Federal government Public Sector Development Programme (PSDP), therefore, it is recommended that a clear, transparent and equitable mechanism for allocation of funds to PSDP projects may be evolved. Disparity in allocation weakens the federation and violates the provisions of the Constitution. The committee expressed concern over rapidly declining country''''s exports and wanted that exports should therefore be brought back to zero rating rather than a minimum tax of 1 per cent. The proposal to offer the taxpayer a choice to be assessed in the normal tax regime is not an incentive at all. The committee members also recommended that sales Tax has increased to 18 per cent from 17 per cent, stating that increase in an indirect tax affects the cost of living of the common man. Therefore the increase may be revoked. The committee also decided to take up the issue of NADRA database of 3.2 million individuals non-compliant with tax laws despite being liable to pay tax for detailed discussion. A member of the committee stated that meeting on the issue would be convened soon and the senior officials of the NADRA would also be invited to explain about 3.2 million potential tax payers. The committee was also concerned over giving tax authorities access to bank account information. This access cannot be unfettered and a basis for exercise of discretionary and arbitrary power and corruption and an infringement of civil liberties and may be challenged as unconstitutional. This power may therefore be withdrawn, the committee member recommended but senior official of FBR have opposed it withdrawal. The Committee also recommended that instead of withdrawing power subsidies the government must undertake serious and urgent power sector reform as subsidies withdrawal is a measure that will pass on to the common man the burden of the inefficiency and ineptitude of the government power sector. Such a withdrawal will crush the common man. The committee also recommended minimum pay rise of 15 per cent as 7.5 per cent announced in budget is very less and insufficient to meet the basic needs of daily life. It is therefore proposed that the salaries must be fixed keeping in view price hike, growing inflation and cost of living.