ISLAMABAD - Senate Standing Committee on Finance and Revenue on Monday proposed the federal government to increase the salaries of civil servants by 20 percent in the annual budget 2021-22 amid higher inflation rate in the country.

Senator Kamran Murtaza informed the committee that inflation was on the higher side in the country. Therefore, the government should increase the salaries of government’s employees by 20 percent instead of 10 percent. The committee agreed with it and recommended the government to enhance the salaries by 20 percent. The committee said the government should give increase on basic salaries instead of ad-hoc relief. The Senate Committee, which met under the chair of Senator Talha Mahmood, continued to discuss the Finance Bill on Monday.

The committee recommended the government to withdraw General Sales Tax (GST) on eatable commodities to provide relief to the poor segment of the society. It recommended to abolish the lifetime token tax on small vehicles. Senator Sadia Abbasi said that poor people had to pay Rs30,000 lifetime token tax on 20-year used vehicles, which was injustice. The committee proposed to reduce tax on services in Islamabad to 5 percent from existing 16 percent. Senator Zeeshan Khanzada said that tax on services in Sindh was 13 percent, in Punjab 5 percent, in KP 2 percent and 15 percent in Balochistan.

The Senate Standing Committee rejected the government’s proposal of increasing General Sales Tax (GST) on crude oil to 17 percent from zero. Senator Zeeshan Khanzada said that government should give tax exemption to the crude oil. He was of the view that GST should be 8-10 percent on crude oil instead of 17 percent. Other members of the committee also opposed the increase in GST on crude oil. 

Senator Sherry Rehman said the government should withdraw decision on increasing petroleum levy by Rs20 per litre. She said the government was announcing increase in oil prices at the time when Parliament was discussing the budget. She was of the view that inflation rate would enhance after the massive increase in petroleum levy. Similarly, she informed the committee that flour prices would surge after imposing tax on flour mills industry. Sadia Abbasi demanded that government should reduce taxes and duties on cosmetics items. 

The committee approved a suggestion that government should announce fresh National Finance Commission (NFC) award before approving the budget. Senator Kamran Murtaza demanded that Senate should also be given powers for voting on Finance Bill. The committee agreed with the proposal and noted that there should be legislation in this regard.

The parliamentary committee sought details from the Federal Board of Revenue (FBR) of sending notices to the business community. Committee chairman showed concerns over sending notices to the businessmen. The business community registered its concerns over the behaviour of FBR and National Accountability Bureau (NAB). The committee noted that it would discuss the matter after the approval of the budget.