ISLAMABAD - The Senate Standing Committee on Finance and Revenue Tuesday recommended the government to reduce the general sales tax (GST) by one percent and to impose agricultural tax in Islamabad Capital Territory (ICT) if it could not levy it in provinces according to the constitution.

The Senate Standing Committee on Finance and Revenue, which met under the chair of its chairperson Senator Nasrin Jalil, has discussed the Finance Bill (2013-14). The committee members were of the view that inflation would fuel in the country with one percent increase in general sales tax; therefore government should withdraw this decision. 

The committee also proposed to impose agricultural tax in ICT, as according to constitution federal government could not impose tax on agricultural sector. Therefore, the federal government should impose this tax in ICT. Senator Haji Adeel, Awami National Party, has said that government should taxes every income whether it comes from industry, agricultural, singer, players and from every profession. He further said that government did not take tax from army personnel in cantonment board while it charges taxes from civilian. Therefore, government should adopt uniform policy.  

The Senate Standing Committee proposed that federal government should impose income support tax instead of levy to help the poorest segment of the society. The committee members were of the view that provinces would get their due share from income support tax under divisible pool, which is not possible under income support levy. Only federal government would be benefited if income support levy introduces in Finance Bill 2013-14.

The committee also recommended increasing the minimum income tax threshold from Rs 4,00,000 to Rs 500,000 annually. The committee members demanded to withdraw tax on vegetable ghee and exports from Khyber Pakhunkhawa and Balochistan, as exports all over the world are zero-rated. The committee also asked to withdraw the proposal for Finance Bill (2013-14) that a registered person would not be required to maintain records relating to gate passer inward or outward and transport receipt in addition to the record.  

However, the committee favoured the proposals to impose withholding tax on private schools despite reservations of some members. Senator Kalsoom Perveen in her remarks said that school would charge tax from students fee, therefore committee should reject this proposals. However, other Senators favoured the proposals.  Similarly, the committee supported the government’s recommendation of imposing tax on Haj operators. Federal Board of Revenue (FBR) chief informed the committee that government has proposed tax on Haj operators instead of Hajis (pilgrims). Senator Haji Adeel opposed the taxation on Haj operators and said that operators would pass it to Hajis. He said India provide subsidy on Haj while our government has imposed tax on it.

The committee was informed that government has imposed tax on packed milk, as our farmers were facing huge loss because of heavy import of dried milk. The committee members showed concerns that prices of packed milk have gone up in the country due to the imposition of tax but the committee did not opposed it.

Senator Kalsoom Perveen demanded tax amnesty scheme to broaden the tax net of the country, which was not supported by the other committee members. Chairman FBR Ansar Javed informed the committee that we have to come out from these amnesty schemes, which did not yield any required result in last many years.

FBR officials informed the committee that government imposes tax on imported motorcycles not from local products. Haji Adeel demanded of the government not to impose tax on builders/ developers as prices of housing and property would increase in the country. FBR informed that builders/ developers are paying only Rs one billion.

FBR officials informed the committee that due to better management and better control only 20,000 cargo containers used in Afghan Transit Trade that were 80,000 two years before.