- PTI leader termed it as most anti-corporate budget in Pakistan’s history
ISLAMABAD: The Senate Standing Committee on Finance on Thursday unanimously rejected the government’s proposal to extend the Rs 25 billion super tax on highly profitable corporates for another year terming it as an illegal tax.
The meeting of the committee was held under the Chairmanship of Senator Saleem Mandviwala to review the tax proposals for the financial year 2017-18. The committee gave its recommendations on the finance bill which were not mandatory for the government to adopt.
The Federal Board of Revenue (FBR) authorities pleaded with the committee to give the super tax another extension but it was unanimously rejected. The senators said that the tax was overburdening the tax compliant corporate sector and giving the wrong message to potential investors.
Senator Ilyas Bilour said the tax was imposed two years back to help the Internally Displaced People (IDPs). However, IDPs got no financial assistance from the funds generated through the super tax. “Nobody knows where its funds were utilised”.
Member Inland Revenue Dr Iqbal pleaded that the tax generated Rs 25 billion per annum and was imposed on highly profitable entities like banks and multinational companies. “The funds generated are deposited in the federal consolidated fund and provinces get their share. The committee should reconsider its decision”.
Rejecting the FBR argument, Senator Saud Majeed said the committee unanimously rejects the proposal. “It was imposed for one year period and its objective was to help rehabilitate IDPs. After one year extension, there was no justification for another extension”.
The committee supported the proposal to end fixed tax on the builders, developers and construction sector. The FBR officials said that the scheme introduced last year failed miserably, as against an estimate of Rs 25 billion in tax returns only Rs 110 million were received during the eleven month period of the current financial year.
Meanwhile, at the National Assembly Standing Committee of Finance’s meeting, PTI leader Jehangir Tareen termed the budget as the most anti-corporate budget in the history of the country. He said that the taxpaying corporate sector has been burdened with the taxes while no serious efforts were made to increase the tax net and curb tax evasion.
He said it seems the government is against corporatisation and wants the informal sector to thrive. The fifty per cent increase in tax, from 10 per cent to 15 per cent on dividend has impacted the stock market that has lost over 4,000 points in two days.
The representatives of the Pakistan Dairy Association said that the nascent industry was over taxed which was resulting in halting the expansion of the industry. They said if the government deferred the Rs 9 billion taxes on inputs for three-year they can guarantee and investment of Rs 180 billion in the sector. The meeting was postponed
The meeting had been postponed to June 6, due to the absence of committee members and Finance Minister Ishaq Dar.
