ISLAMABAD: The Senate Standing Committee on Finance and Revenue, recommended the government to withdraw 17 percent sales tax on electricity bills.
In the current fiscal bill for the financial year 2016-17, the government levied sales tax at the rate of 17 percent on supply of electricity as well as extra tax at the rate of 5 percent. It became effective from July 1 this year through and amendment in the Sales Tax Special Procedure Rules, 2007.
The Senate Finance Committee met with Salim Mandviwala in the chair to discuss a heavy agenda. Due course of discussion on a starred question of Senator Tahir Hussain Mashhadi referred by Chairman Senate towards the committee for further deliberations, the mover observed that the government was charging undue taxes from the consumers on different reasons and categories, which was a grave injustice on the people.
However, Chairman Federal Board of Revenue (FBR) Nisar Muhammad Khan confirmed that 17% sales tax was being charged from the consumers in electricity bills but only on total quantity of consumed electricity and not on the total amount of the bill.
He further briefed the committee that due to the untiring efforts of FBR officials and field staff, ratio of direct taxes in the total tax collection had increased to 41% from 38%. The government has set different taxes rate for filer and non-filers so as to bring the new person in tax net. However, the committee unanimously recommended FBR to withdraw the sales tax on domestic consumers.
As per due parliamentary procedures, the recommendations of the committee will be laid before the House and after discussion and policy statement from the concerned minister, if recommendations are endorsed, then the House will forward it to the government for appropriate action.
As per rules of business of the House, the ministry will either have to implement the recommendations or come back to the house with an acceptable justification for not implementing the recommendations of the committee.
