Senate Standing Committee on Finance, Revenue, Economic Affairs, Statistics and Privatisation on Monday questioned the specifying of Income Tax (Amendment) Bill for traders and urged to extend it to other industries also.
The meeting of the Senate body was held with Senator Saleem Mandviwala in the chair at the Parliament House. The meeting was attended by Senators Mohsin Laghari, Ayesha Raza Farooq, Nuzhat Sadiq, Kamil Ali Agha, Saud Majeed, FBR chairman and officers of Ministry of Law and Petroleum among others.
The Income Tax (Amendment) Bill was introduced in the Upper House on January 1 this year and was subsequently referred to the committee. Speaking on the occasion, Senator Saleem Mandviwala noted that keeping this scheme only for traders is discriminatory and shows that other sectors do not require any such special scheme to include them in the tax net.
The FBR chairman gave a detailed briefing about the bill and called it a voluntary tax compliance bill which is targeted at the 2.2035 million traders of the country to add them to the tax base and have them file returns. The committee was told that out of 2.8 million traders in the country, only 625,000 traders file tax returns.
The committee was briefed that this bill will enhance tax compliance, expand tax base and discourage tax evasion. The bill was termed prospective in nature. Members of the committee asked FBR about the incentives for traders which will encourage them to avail this scheme and were told that if a trader files returns in 2015 but fails to pay in subsequent years, he will be disqualified from the scheme and will have to pay taxes as general taxpayers do.
Senators observed that introducing this scheme was a result of the resistance faced in implementing 0.6% tax on bank transactions. FBR, however, observed that the tax on bank transactions had been introduced by the parliament while this bill had been negotiated beforehand with the traders.
The committee also said that a timeline should be mentioned for the scheme and a clause for verification of progress of scheme should be included. The senators also protested mentioning of parliamentarians and criminals together in clause 16 of part III (General Provisions for the Traders) of the bill. The committee suggested that the clause be amended.
Discussing the demands of Khyber Pakhtunkhwa government regarding payment of windfall levy on oil and gas to the province according to terms of the Petroleum Policy, 2012, the committee also directed that the copies of the previous agreements be sent to Ministry of Law to check the validity of its clauses. Discussion on The Future Markets, Bill, 2016 was deferred because the SECP chairman could not attend the meeting.
