ISLAMABAD  -  The PTI-led coalition government on Monday defended its decision of allowing non-taxpayers to purchase property and vehicles and hinted at imposing ban on tax dodgers to get commercial electricity connections.

Minister of State for Revenue Hammad Azhar said that imposing ban on non-taxpayers to purchase property and cars was unconstitutional. “The constitution allows every citizen to purchase property and vehicles,” said Azhar in a Senate Standing Committee on Finance and Revenue, which met under the chair of Farooq H Naik. He informed the committee that government was mulling over imposing ban on non-taxpayers from getting commercial electricity connections. Senate Standing Committee on Finance and Revenue in its meeting discussed the amendments in Customs Act 1969, Sales Tax Act 1990, Income Tax Ordinance 2001, as part of the Finance Supplementary (Amendment) Bill, 2018.

The Federal Board of Revenue (FBR) also supported the viewpoint of the government to allow tax dodgers to purchase vehicles. Chairman FBR said that vehicles purchase was a provincial subject. Imposing ban on purchasing vehicles had hit the economic activities. 

Committee members of opposition parties had criticised the government for allowing tax dodgers to purchase cars and property in the recent mini-budget.

Committee member Haroon Akhtar said that previous PML-N government had imposed ban on non-taxpayers to purchase property and vehicles in order to bring them into tax net. However, the incumbent government allowed tax dodgers. He added that government should announce its economic policy and vision. “Why, the government has presented the mini budget,” he asked.

The committee was told that the purpose behind removing the bar was the legal hiccup in the implementation of this decision as it did not specify measures for issues of inheritance, criteria for pensioners and overseas Pakistanis. It was told that the government was in process of developing a mechanism to address the issue and take measures to broaden the tax net. The committee chairman asked Law Division and FBR as well as the members to come up with proposed draft on purchase and registration of property by non-filers.

Earlier, the minister of state for revenue said that government was compelled to make amendments in Finance Bill 2018-19 to save the country from the default. The country’s budget deficit would have touched Rs2800 billion during ongoing fiscal year from Rs2213 billion of the previous year. Therefore, the government had to introduce the mini-budget to contain the budget deficit.

Meanwhile, the government needed additional financing of $8 billion this year, said Hammaz Azhar. He further said that government had not burdened the existing taxpayers. “We have partially reduced the relief given to salaried and non-salaried government employees by previous government. Similarly, the government has also increased the regulatory duties imposed on commodities to control the soaring current account deficit of the country. The government has withdrawn the decision taken by previous government to increase the petroleum levy from Rs189 billion to Rs300 billion,” he added. 

Another reason for bringing mini-budget was unlikely provincial surplus of Rs285 billion as estimated by the PML-N government. Azhar said that only KPK recorded surplus budget last fiscal year.

The Committee also discussed revised tax rates and decided to defer the discussion till more information was received. Amendments in Federal Excise Tax 2005 and compliance of earlier directives will be discussed in the meeting to be held on Tuesday.

The Committee was told that the intention behind readjustment of custom and general sales duties on raw materials is giving benefit to and flourishing the local industry by.

The meeting was chaired by Senator Farooq Hamid Naek here at the Parliament House on Monday and was attended among others by Senators Mohsin Aziz, Khanzada Khan, Anwar-ul-Haq Kakar, Haroon AKhtar Khan, Musadiq Malik, Mushahidullah Khan, Muhammad Ateeq Sheikh and Talha Mehmood.