ISLAMABAD: Party is not over yet for Finance Minister Ishaq Dar and Chairman Federal Board of Revenue (FBR) Nisar Muhammad Khan as they will again defend the defended government’s decision of levying 0.3% Withholding Tax on bank transactions of Rs 50,000 made by non filers in the Senate Standing Committee on Finance and Revenue today (Monday).
WHT is being collected under Money Bill, Income Tax Second Amendment Bill 2015 (Ordinance No XV of 2015) promulgated On October 31, government this year. As per this ordinance tax exemption as per income tax ordinance 2001 available to Pakistan Real-time Interbank Settlement Mechanism (PRSM) was been withdrawn.
As per clause (b) of sub-section (1) of section 153; provided that the recipient of the payments has made advance payment of tax equal to two percent of the total turnover of the corresponding period of the immediately preceding tax year.
Moreover, the second schedule said that tax payable on the income from companies engaged in freight forwarding, air cargo, courier, manpower, outsourcing, hotel, security guard, software development, tracking, advertising (other than by print or electronic media), share registrar, engineering or car rental services would not be less than 2% of the gross amount of turnover from all sources and that the company furnishes in writing an irrecoverable undertaking by 15th of November 2015 to present its accounts to the commissioner within 30 days of filling of return for audit of its income tax affairs for tax year 2016.
On the 15th of this month the said Income Tax Second Amendment Bill 2015 was laid in the Senate and House referred it towards the Standing Committee for further deliberation and passage.
As per rules and regulations, every bill laid before the either house is referred to the concerned standing committee for further discussion and approval and if committee does not approve any bill then the government reserves right to get it passed on majority basis from the Senate or National Assembly.
Although, both Ishaq Dar and Nisar Muhammad Khan aptly defended government’s decision of levying 0.3% Withholding Tax on bank transactions of Rs 50,000 made by non filers before the National Assembly Standing Committee on Finance on 26th of the last month.
However, situation is quite different in Senate Finance Committee than NA Finance Committee because government enjoys absolute majority support in the National Assembly Finance Committee with its own chairman.
But, in the Senate Finance Committee, Chairman Salim Mandviwala belongs to opposition Pakistan People’s Party (PPP) as well as six outspoken senators including Ilyas Bilour, Mohsin Aziz, Nasreen Jalil, Kamil Ali Agha, Fateh Mohammad Hassani and Islamuddin Sheikh also belonged to opposition benches. Moreover, another staunch critic of government PPP Senator Saeed Ghani will also be attending today’s meeting as special invitee.
Therefore, it will not be easy job for both Dar and Nisar to satisfy the reservations and objections of opposition Senators because opposition parties are trying to get revival by politicizing on this issue.
However, in case government fails to get this ordinance passed from Senate committee and then from the Senate because government also does not have majority vote in Senate, then as per rules, government will have to convene joint sitting of both the houses of the parliament to get this ordinance passed from the parliament. Once this ordinance is passed by the parliament, then it will become an act and a law..
