ISLAMABAD: The Senate Standing Committee on Finance and Revenue has approved the imposition of 0.6 per cent tax on all banking transactions of over Rs50,000.
Federal Board of Revenue Chairman Tariq Bajwa, while talking to media, said that a law to track down benami land titles for tax purposes was ready and will likely to be introduced after the budget session.
The committee led by Senator Salim H Mandviwala of PPP began deliberations on federal budget 2015-16 for amendments and recommendations to the National Assembly regarding fiscal and development measures for next year.
Senators opposed the super tax at the rate of 3pc and 4pc on individuals or companies having over Rs50 million annual income to support the temporary displaced persons (TDPs) of Waziristan.
During the meeting, Finance Minister Ishaq Dar said that the expected collection through super tax would be around Rs20-22 billion that would be applicable to 170 companies, eight AOPs and three individuals with annual income exceeding Rs50 million.
He said the FBR had done a series of exercise and the reduction in income threshold would have affected thousands of people but negligible increase in tax collection and hence rejected due to higher political nuisance. The minister said current situation was very extraordinary because around Rs45 billion would be required for security enhancement and around Rs55 billion for the resettlement of TDPs.
The committee agreed to go ahead with 0.3pc tax on all banking transactions for tax filers and 0.6pc for non-filers over Rs50,000 per transaction but recommended that a policy message should go out in the shape of facilitation that tax filers were better off paying taxes and filing returns so that non-filers come into the tax net. Besides cash withdrawals, these tax rates would be applicable on demand draft, pay orders, SDRs, CDRs, STDR, call deposit receipt and RTCs.
Meanwhile, the federal government also reached an agreement with Khyber Pakhtunkhwa to extend sales tax laws to the provincially-administered tribal laws which are exempted from the taxes.
The meeting was informed that a meeting attended by the prime minister and governor and chief minister of KP had decided to extend sales tax laws to provincially administered tribal areas of KP.
