Senate body reviews FED on essential items, proposes reduction in duties

ISLAMABAD: Senate’s Standing Committee on Finance, Revenue and Economic Affairs on Thursday reviewed the Federal Excise Duty (FED) clauses of Finance Bill 2019 and recommended a reduction in duties of various daily-used and essential items to provide relief to the masses.

Duties on the essential items, including sugar, cooking oil, ghee and eggs should be reduced, the committee proposed during its meeting held under the chairmanship of Senator Farooq H Naik.

The committee also reviewed the Sales Tax clauses of Finance Bill 2019 as well as the recommendations proposed by the representatives of different industrial sectors.

The members of the committee also proposed a change in different clauses of Customs Act 1969 and the Sales Tax Act 1990.

Article continues after this advertisement

The committee members expressed reservation on different slabs of income tax and called for a review of these so as to put less burden on low-income people.

The committee, while reviewing the Income Tax Ordinance 2001, expressed reservations on its various clauses as it feared that their implementation might lead to a hike in inflation.

The committee also discussed proposals of Senator Sabir Shah on increasing the salary of government employees from grade 1 to 16 and tax exemption to their salaries.

It discussed Senator Dilawar Khan’s proposal related to institutional reforms in the Federal Board of Revenue for increasing the tax net.

The committee approved Senator Dilawar Khan’s proposals with regard to ‘increasing the tax on the agriculture sector’ and ‘adopting austerity measures to increase the revenue’.

The committee also approved the proposal with regard to ‘decreasing the non-development budget for minimizing the financial deficit of the country’.

Senator Dilawar Khan had further sought an approval for ‘removing the taxes of salaried class’.

Senator Mohsin Aziz said revenue collection was necessary to run the affairs of the country, adding that the government wanted to achieve the agenda of economic stability and growth.

He said institutional reforms were among the top priorities of the incumbent government, as without them, economic stability was not possible.

Meanwhile, FBR Chairman Shabbar Ziadi along with Inland Revenue Member Dr Hamid Atiq Sarwar briefed the committee on various other issues and finance bill clauses.

Dr Hamid Atiq Sarwar informed that out of around five million bank account holders, only 1.5 were registered.

He said the FBR had a target to increase the number of tax filers from two million to four million to broaden the tax base.

The official said that the FBR has the data of five million ‘Benami Accounts’, which would be targeted and brought into the tax net.

He further informed that the FBR intends to collect a revenue of Rs250 billion from the withdrawal of zero-rated regime for the export-oriented sector.

The committee proposed three percent withholding tax on the services sector instead to four percent.

Senator Ayesha Farooq said the government had increased the revenue target by 34pc, which would be unacceptable and would affect the low income people.

Among others, the meeting was attended by senators Mohsin Aziz, Syed Shibli Faraz, Ayesha Raza Farooq, Dilawar Khan, Muhammad Talha Mahmood, Imamuddin Shouqeen and representatives of the Ministry of Finance and Revenue and the Ministry of Commerce.

- Advertisement -
- Advertisement -

Must Read

Tech sector continues to thrive, prosper: WIPO report

Despite the economic devastation wrought by Covid-19, the new technology sector continued to thrive and prosper last year, the UN’s World Intellectual Property Organisation’s...