ISLAMABAD - The Senate Standing Committee on Finance and Revenue on Friday expressed concerns over the proposed taxation legislations in budget, which are taken under the agreement of Organisation of Economic Cooperation and Development.
The Committee, which met under the chair of Senator Farooq H Naik, has noted that these recommendations would halt the foreign investment in the country. The committee rejected the government's proposal to tax Google and other websites' offshore digital services.
The Federal Board of Revenue has proposed five percent income tax on offshore digital services. Finance Bill 2019 defined fee for offshore digital services as any consideration for providing or rendering services by a nonresident person for online advertising including digital advertising space, designing, creating, hosting or maintenance of websites, digital or cyber space for websites, advertising, e-mails, online computing, blogs, online content and online data, providing any facility or service for uploading, storing or distribution of digital content including digital text, digital audio or digital video, online collection or processing of data related to users in Pakistan, any facility for online sale of goods or services or any other online facilities.
Banks are required to collect five percent income tax on gross amount of fee remitting outside for offshore digital services. The committee member Dr Musadiq Malik of PML-N opposed the proposed tax on offshore digital services by saying it would discourage the new investment in new technology. The committee has also rejected the proposed additional taxation on Associate Companies. Member FBR Dr Muhammad Iqbal said that government is bound to make legislation for Pakistanis working abroad and foreign investors working in the country under OECD.
He added that government is taking this measure to stop tax evasion in the country.
Meanwhile, Pakistan Tehrik-e-Insaf Senator Mohsin Aziz has protested against the behaviour of federal government and walked out of the Senate Finance Committee meeting for not releasing the allocated funds for projects of KP.
Senator Mohisin aziz has said that the federal government has not released any amount for the 18 projects included in the PSDP 2017-18. He said that federal government has released only 15 percent for KP while 65 percent funds has been released for Punjab through PSDP. Senator Mohsin Aziz said smaller provinces are left behind in the development process and sense of deprivation is increasing among the smaller federating units.
He said that the federal government is neither giving details of the projects nor sharing information of the amount released for those projects.Senator Mohsin Aziz added that even in the new PSDP no funds have been allocated for the major projects of KP which will increase deprivation among the people of the province.
