ISLAMABAD: The Senate Standing Committee on Finance on Thursday recommended rationalising of penalties under the reformed general sales tax (RGST) and tax exemption for food items, medicines and educational stationery.
The committee also included the dissenting notes of the Muttahida Qaumi Movement (MQM), Pakistan Muslim League-Nawaz (PML-N), Awami National Party (ANP), PML-Quaid (PML-Q) and the Jamaat-e-Islami (JI) in its report to the Senate.
All opposing political parties recommended enforcement of agriculture income tax in their dissenting notes, the report said. After agreeing to the unanimous recommendations, some members of the committee desired that their principled position should be reiterated in the committee’s report.
Committee Chairman Senator Ahmad Ali said the political parties had not deviated from their stance and had proposed amendments to improve the bill. “The principal stand of the committee has not been compromised,” he said. The committee held five meetings to consider the bill and formulate its recommendations.
After thorough discussions and deliberations, the committee unanimously recommended 15 amendments for the Senate’s consideration. The committee recommended to the Senate that the recommendations might be passed on to the National Assembly.
Senator Prof Khurshid Ahmed’s note of dissent said that he was totally unconvinced that the constitutional requirements of Article 144 and the restrictions imposed on parliament about its jurisdiction in case of legislation outside the federal legislation list had been fulfilled. He felt it was appropriate that provincial legislation and resolutions were a constitutional requirement before any legislation could be made in parliament.
The present bill was introduced under pressure of external financial institutions, particularly the IMF, he said. The government brought it to parliament in haste and without doing proper homework on the matter, he added. This also became clear during the committee meetings, Ahmed said, adding that he remained unconvinced about FBR’s capabilities for the implementation of the revised law, particularly in relation to timely refunds.
The dissenting note submitted by Senator Haroon Khan said all agriculture income must be taxed in the same manner as other income was taxed in the country. Provincial governments should impose income tax on the agriculture sector in a manner similar to imposing general sales tax on services.
“Until the provinces established mechanism to collect tax on agricultural income, the federal government should take responsibility of the collections, as was being done for three provinces for the collection of GST on services. This can generate revenue in excess of Rs 100 billion,” the note said.
Senator Ahmed Ali of MQM in his dissent note said that zero-rated regime for textile exporters should be maintained and the provinces should impose one time agriculture income tax. The PML-N submitted Nawaz Sharif’s letter to the president as the dissenting note.
The ANP said in its dissent note that its recommendations had not been included in the committee’s report.
