Senate Standing Committee on Finance has put forward 69 recommendations for Finance Bill with respect to budgetary measures and 23 recommendations for Public Sector Development Programme (PSDP). These recommendations would be presented to the Senate (today) Wednesday for debate in the house and subsequently onward submission to the National Assembly for incorporation in Finance Bill, 2015.
Talking to Business Recorder, Chairman Senate Standing Committee on Finance Saleem Mandviwalla stated that for the first time all the recommendations proposed by the committee are directly related to the budget. Around 150 recommendations which were irrelevant to the Finance Bill have been withdrawn. The committee has recommended that the Tax Reform Bill was passed by the Senate in 2012 and was presented in the National Assembly in 2013. The government may reintroduce the Bill so that the country may benefit from the provisions of the same.
The full Senate Standing Committee meeting on Finance has recommended that the existing disparity in amount of pensions payable to old and new pensioners be removed. All pensioners to be treated equally irrespective of date of retirement and pension. The committee recommended that withholding tax on internet usage may be removed to encourage access to the Internet. It recommended that the maximum rate of GST including on POL products may be kept at 15 percent. Budgetary measures to expand the tax net are insufficient. Retail centers in major urban centers, private hospitals and the doctors working therein, private schools, beauty salons, guesthouses etc may be required by law to file income tax returns.
Lowest Slab for A1 General Tariff for Residential consumers may be increased from 50 units to 150 units. It recommended that FED on cigarettes may be increased from 58 to 75 percent, as cigarettes are extremely harmful to the health of citizen. It recommended that it is a great injustice that only Rs 16 billion have been allocated to Karachi which contributes 65-70 percent to the national exchequer of Pakistan. It recommended the elimination of petroleum levy. It recommended that the abolition of sales tax on gas, electricity and petrol to provide relief to the masses. It recommended a special package of Rs 10 billion to revive Karachi's infrastructure and boost development.
The Senate recommends that no reduction or reallocation be made in the approved development budget without prior approval of the Parliament. It recommended that the Ministry of Finance may present broad parameters of the Budget in March every year and detailed budget by mid May every year in both Houses of the Parliament for pre-budget discussion. It recommended that midyear budget review may be made mandatory and should be done each year in the month of February in Parliament for purposeful discussion and input.
It recommended that no supplementary grant involving expenditure over and above 5 percent of the amount sanctioned in the budget be made without prior approval of the Parliament. It recommended that frequent floods and incessant rainfall have completely devastated upper and lower parts of the Province of Sindh, leading to an acute shortage of Capital to the farmers, due to the destruction of crops. As such it is recommended that the Federal Government direct the State Bank of Pakistan to issue instructions for making credit available to farmers in Sindh on low interest rate.
It recommended that the Federal Government should only fund those projects under PSDP which fall in the Federal Legislative List. Projects that fall in the domain of Local or Provincial Governments should not be funded from PSDP and all such savings should be diverted towards Energy Sector in order to reduce the load shedding.
It recommended that a single "Energy Ministry" be created by merging different Federal Ministries dealing with energy subject, in order to fast track actions against ongoing issues relating to energy. It recommended that the incomes from all sources including from agricultural produce may be brought under the tax net so as to generate revenue for sustainable economic development. The proposal pending with Council of Common Interest with regard to uniform tax on agricultural income be finalised. It recommended that the ongoing menace of circular debt may be brought to an end on urgent basis in order to deal with ongoing energy shortage.
It recommended that the Federal Government may remove injustices and discrimination in the taxation system for optimal utilisation of available resources. It recommended that the Federal Government may introduce reforms to establish good governance, curb corruption, collect taxes efficiently and plug leakages so as to broaden the tax base.
It recommended that the Federal Government may take immediate measures to plug leakages and corruption in Public Sector enterprises in order t eliminate the current annual losses of around Rs 500 billion.
The committee recommended that the Government may promote micro financing and venture financing. It recommended that the government may promote the establishment of small and medium enterprises and patronise domestic and agro based industry in the country. It recommended that in view of the recent record of huge gaps between targets set and results achieved in revenue collection, the government should set realistic targets and then hold the FBR responsible for underperformance.
It recommended that subsidies to State Owned Enterprises (SOEs) be reduced by at least 10% and the amount may be diverted to the power sector to provide immediate relief to the people of Pakistan and the government must consider making set Rules for restructuring of SOEs.
It recommended that the budgetary proposals, especially the PSDP/annual plan is presented to the concerned Committee of both Houses at least three weeks before laying the budget in the House. Ideally all Legislators should be given sufficient time and details to make recommendations but the Senate Standing Committee which is tasked to make recommendations within 10 days needs more time and a detailed briefing for useful and practical recommendation.
It recommended that PSDP allocations should be prioritised on the basis of national economic and strategic importance as well as balanced development in all Provinces and Regions. It recommended that subsidies to be enhanced for the tube wells in Balochistan. It recommended that trade deficit may be reduced by increasing exports and decreasing import of luxury items so that import bill to be reduced to the maximum extent.
It recommended that the Federal Government should make announcement in this Annual Budget 2015-2016 a special scheme for sending FATA Youth in Middle East, South Korea and Malaysia for employment. It recommended that all discretionary power and funds for everyone to whom Government pay from national kitty may be audited. It recommended that Income from all sources salaries, businesses, property and agricultural produce above the taxable limit may be taxed.
It recommended that tax on sales/purchases of all sort of properties ie urban, rural, commercial, industrial and agricultural should be collected. It recommended that the Land owners of Balochistan should be given subsidy on agriculture. It recommended that import of five year reconditioned/old cars may be allowed. It recommended that the government grants approval for installation of 2000 Tube wells for the land owners of Balochistan to reduce backwardness in Balochistan.
It recommended that immediate and dedicated work should be started on the pending agreements of Pakistan-Iran on Natural Gas and Electricity projects. It recommended that for the social welfare of all minorities in Pakistan sufficient allocation of funds should be allocated. It recommended that a country-wide programme be launched to train farmers to shift from traditional tilling and harvesting ways to mechanised farming and for this purpose an initial amount of Rs 50 crore be allocated.