ISLAMABAD: The Senate’s Standing Committee on Finance, Revenue and Economic Affairs on Thursday rejected the government’s proposal to impose a luxury tax on farmhouses and houses bigger than two kanals in area.
The meeting of the standing committee was held with Senator Farooq H Naik in the chair. The committee also reviewed the amendments made to the Public Finance Management Act, the Income Tax Ordinance, 2001, and the Anti-Dumping Law.
The finance ministry informed the committee that the government intends to impose a luxury tax on farmhouses as well as houses that are bigger than two kanals in area.
In response, the committee members opposed the government’s plan and rejected the proposal.
Meanwhile, reviewing the Income Tax Ordinance, 2001, the committee deliberated over tax mechanisms related to plant and machinery, royalty fee for offshore digital services, shipping policy, rental income, depreciation, capital gains tax and charitable donations.
Special provisions relating to builders and developers were also discussed in detail.
The Federal Board of Revenue (FBR) officials said that the prime minister had announced a package for the construction industry and interested builders and developers need to get themselves registered with the board before December 31, 2020.
Builders and developers are expected to approach the FBR with an approved design and are expected to complete the projects before December 2022.
While the FBR assured that the board will not ask the builders and developers regarding the source of their income the committee chairman raised concerns regarding the possibility of the National Accountability Bureau (NAB) inquiring about the source of income once the builders and developers have completed the projects.