Islamabad, June 12, 2023 (PPI-OT): The Senate Standing Committee on Finance and Revenue on Monday debated that the new budget starts with a “sorry” picture. Senator Mohsin Aziz said that the new budget doesn’t bring any revival of the industries or the exporters and lack fundamental reforms, directing towards bolstering of the country’s economy. He said that the new budget seems to start with debits and forecasted a loan of 7 trillion at the beginning of the new budget.
The Minster for Finance and Revenue Aisha Gaus Pasha said that the new budget should not be out rightly discredited and maintained that country was saved from being default even after the disastrous floods and Global Climate crises. She said that the new budget brings handsome agricultural packages which is the backbone of the economy resulting in increase and accelerated growth. She also said that the Money Bill, 2023 brings no increase of duties on import of essential items and promotes energy efficiency and conservation. It also promotes the Information Technology.
The Minister for Finance and Revenue addressed the committee that we foresee 3pc economy growth and a reduction of average inflation from 29 pc to 21 pc. She also said that new regimes of direct taxes will prove progressive. She said that the previous budget collected 39 pc of domestic taxes which makes the domestic income tax to almost 50 pc. She said that the budget 2023 is according to the IMF structure. She also believed that we should must draft a charter of economy which is the need of the day keeping the country’s financial state.
Deliberations on The Money Bill 2023, was commentated by the Senate Finance and Revenue Committee under the chairmanship of Senator Saleem Mandviwalla today at the Parliament House. The committee commenced its first session by kicking off with the Customs Act. The committee examined the bill, clause by clause and accepted amendments in the Customs Act however the clause related to declaration and assessment for home consumption or warehousing was deferred on the point of number of days for the trader to file goods declaration. The committee recommended to review the number of days as per “Land Border Policy”.
It was also apprised that Under the Customs Act the period for which goods may remain warehoused has been enhanced from one month to three months. It was also apprised that the smuggled goods will be confiscated and the offender will be penalised exceeding 10 times the value of the goods and if the value exceeded three hundred thousand rupees he will be further liable to conviction by a special judge to imprisonment not exceeding six years and to a fine exceeding 10 times but not less than the value of the goods. Amendment has also been made in the vesting of the confiscated property in the Federal Government and that the board may authorize the use of confiscated vehicles conveyance and other equipment’s for anti-smuggling operations. The Minister of State for Finance and Revenue remarked that the proposals in the Customs Act has trade friendly schemes facilitating the trader.
The committee also concluded recommendations on the Sales Tax provisions of Finance Bill, 2023-24. The committee unanimously rejected the exemption of sales tax on supplies and import of raw materials, plant and machinery and supply of electricity to the industrial units and consumers. “give this money to FATA but do not put exemptions” the chairman committee remarked, the Minister of State and Finance assured the committee to withdraw the amendment. Similarly, taxes on the Eighth Schedule on POS retailer which are proposed to be enhanced from 12 pc to 15 pc has also been rejected unanimously by the committee stating that such enhancement is only encouraging the non-registered sector. The committee also deferred the proposal of tax on the Sixth Schedule which says that any package which is under a brand name is chargeable.
The committee failed to understand the reason behind this and recommended to review the proposal. Similarly, the committee recommended to review the proposal of bill supply of consumer goods sold under the brand names or trademarks to be proposed to be taxed at 18 pc. The committee also concluded deliberations on the Federal Excise Provisions of Finance Bill, 2023. The matter of chargeability of FED on goods and services specified was deferred for review however the FED proposed on royalty and fee for technical services in Table-II of the first schedule was accepted. It was apprised that the extension in exemption of sales tax to NMDs (FATA/PATA) for another one year ending 30-06-23 is given through the new budget.
The committee also concluded discussion on the Islamabad Capital Territory (Tax on Services) provisions of Finance Bills, 2023 through which digitalised mode of services are facilitated. It is proposed to harmonise tax regime on restaurants with Punjab Revenue Authority at reduced rate of 5pc in case payment is received through credit debit mobile wallets and QR scanning. It was briefed that the electric power transmission services are proposed to be taxed at 15 pc as revenue measures.
The 2nd session deliberated on the recommendations of the Income Tax Ordinance, 2001. The chairman FBR apprised that the bill proposes to amend definition of income to include any amount subject to collection or deduction of tax (Bonus Share). The Chairman Committee was of the view that the proposal of BONUS SHARE is principally wrong, the amendment was deferred for review. The Chairman FBR said that the rationalisation of Super Tax under section 4C to apply on all persons across the board in income above Rs. 150 (m) insertion of additional three new income slabs of Rs 350(m) to Rs 400 (m) Rs 400 to Rs 500 (m) and Rs 500 above to be taxed at 6 pc 8pc and 10 pc respectively.
During the 2nd session Representatives from the Faisalabad Chamber of Commerce and Industry also put forward their concerns on the new proposals in the Finance Bill,2023. It was debated that super tax should be rationalised and exporters should be exempted from super tax, it was also contended that tax on bonus should not be added as it may reach up to 75 pc of profit earnings and definition of associate should not be amended. The Islamabad Chamber of Commerce and Industry, representative of the FPCCI also put forward the concerns and anomalies in the new budget.
The meeting was adjourned to meet again tomorrow 13-06-2023 at 11 am for further deliberation. The meeting was attended by, Senators Saadia Abbasi, Mohsin Aziz, Kamil Ali Agha and Senator Zeeshan khan Zada. Minister for Finance and Revenue Aisha Gaus Pasha chairman FBR, Member Tax Policy, Member Customs, officials from the Ministry of Commerce and other related departments were also in attendance.
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