Tax Laws (Amendment) Bill 2019 recommended to lower house

ISLAMABAD: The Senate Standing Committee on Finance, Revenue and Economic Affairs on Tuesday unanimously recommended the Tax Laws (Amendment) Bill 2019 to the National Assembly (NA), saying the bill doesn’t fall within the purview of Article 73 (2) of the Constitution.

After due deliberation, the committee decided the exemption was not a remission, therefore, the said bill didn’t fall within the purview of money bill.

It was then unanimously recommended to the NA that the Tax Laws (Amendment) Bill 2019, which didn’t fall within the purview of Article 73 (2) of the Constitution, might be withdrawn by the government and the same be brought under Article 70 of the Constitution of Pakistan 1973.

Senator Farooq Hamid Naek chaired the meeting that was attended by Senators Mian Muhammad Ateeq Shaikh, Anwar ul Haq Kakar, Imam-ud-Din Shouqeen, Muhammad Akram besides officers from the Ministry of Finance, Revenue and Economic Affairs and the Ministry of Law and Justice.

The committee, in its meeting held here at the Parliament House, discussed in detail the bill titled “The Tax Laws, 2019, laid before the Senate under Article 73 of the Constitution and referred to the committee on March 4.

At the outset, the committee chairman inquired whether the said bill deemed to be money bill as provided in Article 73 (2) of the Constitution of Pakistan, 1973 or otherwise.

The FBR’s member (customs) responded that the said bill contained the remission of taxes, therefore, it was a money bill as provided in Article 73 (2) (a) of the Constitution of Pakistan, which deals with the imposition, abolition, remission, alteration or regulation of any tax.

He further informed that the customs act had already given concession to the equipment, materials, plant machinery imported by the concession holder, its operating companies and contractors and sub-contractors for 40 years. “However, now the words Gwadar International Terminal and Gwadar Marines Services Limited, their contractors and sub-contractors have been included.”

The customs official further explained that these amendments had been moved after discussion and deliberation with the Ministry of Maritime Affairs and in consequence of concession agreement with the Chinese government.

Naek briefed the participants of the meeting regarding definition of the word remission given in the Black’s Law Dictionary.

He read out the meaning of remission “A cancellation or extinguishment of all or part of a financial obligation”.

He was of the view that the amendments containing in the said bill were not remission but these amendments were exemption of tax for 40 years. The chair read out the meaning of word exemption which means “freedom from a duty, liability or other requirement”, therefore, he said the bill didn’t not fall within the purview of money bill as it deals with the exemptions of taxes instead of remission of taxes, as provided in Article 73 (2) (a) respectively of the Constitution of Pakistan 1973.

Seeking views of the Ministry of Law about the definition of remission and exemption, the committee expressed its displeasure over the absence of the secretary law or any other senior officer not below the rank of an additional secretary.

In response, Deputy Draftsman Ministry of Law Abid Ali said the secretary law could not attend the meeting due his preoccupations at the Sindh High Court.

Regarding views on remission and exemption, he said he was not prepared in this regard and was unable to explain the terms.

Senators Mohsin Aziz and Mian Muhammad Ateeq Shaikh were of the view that the exemption of tax should be project bound, material bound, contractor bound, and it should be free for plants and equipment and specifically for the development of Gwadar Port.

Senator Dilwar Khan was of view that the proposed exemptions in the said bill could be misused as a result of SRO 517 issued for the exemption of taxes in Gadoon Amazai