The Senate Standing Committee on Finance has expressed serious concern over non-incorporation of most of its recommendations in the Finance Supplementary (Second Amendment) Bill 2019 despite assurance by the Ministry of Finance and the Federal Board of Revenue (FBR).
The issue came to light during the meeting of the committee held here at the Parliament House on Tuesday on the implementation status of recommendations made by the committee on the Finance Supplementary (Second Amendment) Bill 2019 and adopted by the House. Senator Farooq H Naik chaired the meeting.
When the FBR officials started clause by clause reading of the Finance Supplementary (Second Amendment) Bill 2019, the committee members said that there is no need for reading and the FBR should inform about the number of recommendations incorporated in the bill.
The officials said that all FBR members are ready to brief the committee on clause by clause recommendations and status of the said bill.
Senator Mian Muhammad Ateeq Sarwar said that the new federal budget is also coming. If the government has no intention to incorporate recommendations of the committee in the Finance Bill 2020, there is no justification for the whole exercise. "Why should we conduct such a cumbersome exercise?" he questioned.
He further stated that the entire budget exercise is useless in case the committee's recommendations are not incorporated in the upcoming finance bill.
Farooq H Naik directed the Finance Ministry and the FBR to submit a working paper on the recommendations incorporated in the Finance Supplementary (Second Amendment) Bill 2019.
Another committee member said that only a few recommendations have been made part of the Finance Supplementary (Second Amendment) Bill 2019.
The standing committee also approved the PSDP proposals of the Finance, Revenue, and Economic Affairs Divisions for their various development projects.
Earlier the committee expressed its displeasure over the absence of finance minister, minister of state, secretary finance and FBR chairman, saying that such an attitude is not acceptable.
Discussing the agenda items, Senator Engineer Rukhsana Zuberi pointed out that the State Bank of Pakistan is not cooperating with the young freelancers who are earning foreign exchange reserves.
She said that the government should allow such freelancers to open their accounts in different financial instruments including PayPal to ensure smooth and free of charge transfer of foreign remittances.
She also suggested the government to take special measures to increase the export of services in the information technology and software sectors which currently stands at US $1 billion; however, this sector has the potential of over $5 billion in the country.
An official from the Ministry of Finance informed the committee that the government has already taken such measures and now the freelancers are receiving their foreign remittances through banking channels without any additional charge.
He said that during the last month, the country received $120 million through such remittances. Moreover, he said in this regard the government is also planning to organise the training sessions in various cities for the young freelancers to make them aware of receiving foreign remittances against their services.
To a query, official said that the government initiatives to support SME financing mainly include improving regulatory framework through revising prudential regulations, strengthening secured transactions framework and introduction of SME targets, market development through SME supportive subsidized refinance schemes, and improving capacity building and awareness creation of bankers and SMEs.
Under National Financial Inclusion Strategy (NFIS), SME sector has been identified as one of the key priority areas. Key benchmarks to be achieved by 2020 included to increase SME share of private sector credit and increase number of borrowers.
Responding to a query on exporters in IT sector, official said that the exporters of software can retain amounts upto 35% of their export earnings in Special Exporters Foreign Currency accounts opened with the Authorized Dealers exclusively for payment of commission/discount to the overseas agents/buyers.
Official informed the committee that, "funding to exporters is a real challenge". The meeting was attended by senators including Dilawar Khan, Anwar-ul-Haq Kakar, Mushahidullah Khan, Mian Atiq Sheikh, Rukhsana Zuberi and others.