Finance committee endorses disabling SIMs to enforce filing of returns

The meeting of the Senate standing committee on Finance Revenue and Economic affairs was held under the chair of Senator Saleem Mandviwala.

The FBR authorities informed the committee that it has proposed to disable mobile phone sims to enforce the filing of Income tax returns. The tax department places a penalty of 0.1 percent for each day after the due date for the filing of tax, he added.

In addition Chairperson National Tariff Commission briefed the committee that changes have been made in the Finance Bill regarding the rationalization of tariffs for the packaging and dyes industry.

Senator Anwar-ul-Haq Kakar said that the export of raw materials should be discouraged so that the supply of raw materials within the country could be increased to promote industrialization.

FBR officials briefed the committee on tax exemptions on the import of bulletproof buses and special vehicles for the security of foreigners working on CPEC and major power projects. They said that such special vehicles could be imported only after the NOC of the Interior Ministry and only federal, provincial governments would be authorized to import such vehicles.

FBR officials told the committee that now payments of over one million could only be made through digital means, the purpose of which is to record financial transactions.

Leader of the Opposition Shahzad Waseem, quoting FATA / PATA, questioned that despite tax exemptions being given in these areas till 2023, notices are being sent to the people.  Chairman FBR replied that FATA / PATA has only income tax and sales tax exemption and notices have been sent with reference to federal excise duty.

Dr. Ayesha Ghous Pasha while briefing the committee regarding Gain Tax said that the tax period on immovable property is being extended from four years to six years so that people’s attention can be drawn from non-productive to productive investment in order to encourage industrialization.

The exemption under international agreements was reviewed by the committee and recommended to omit the resident person solely by reason of the performance of services under the agreement. A new insertion in the exemption under international agreements will also give powers to the Federal Government to relax any rules and to provide for exemption on any grant in aid and development assistance.

Furthermore the amendment on the salary paid to an employee which has enabled certain tax credits elimination as part of personal income tax reform was also accepted by the committee.

The committee also accepted the new insertion of 1DC and 1DD which will enable for withholding of tax at source on services provided by international money transfer operators and withholding of tax at source on services provided by card network companies and payment gateways.

The committee was also apprised that the aforementioned newly inserted sections have been given final tax status on non-resident persons.

The committee was apprised that the new insertion of section 7A will provide certain industries’ undertakings brought under minimum tax regime on their import, to check misuse of import to raw material, was also accepted by the committee.

The business community also participated in the committee and forwarded their proposals to reduce prices on edible items by exemption of taxes in order to give sigh of relief to the general public.

The representative of the Bakers and Sweets Association proposed to exempt the 17 percent sales tax earlier implemented on bakery items and sweets as the most commonly used edible for all the classes of society who has to pay an additional 9.5 percent tax, the matter was referred to the anomaly committee for consideration of the proposal.

The committee also recommended imposing 20 percent taxes on sugary beverage juices implying that it is injurious to health.