ISLAMABAD: The Senate Standing Committee on Finance and Revenue on Friday opposed the new insertion of a section in the Bill to impose Withholding Tax on payment abroad through credit/debit or prepaid cards.
Chairman Federal Board of Revenue (FBR) Asim Ahmed informed the Committee that the Advance Tax was adjustable and it was aimed at encouraging consumers to file their tax returns.
Chaired by Senator Saleem Mandviwala, the meeting discussing the Ordinance clause by clause and approved several amendments, besides dissenting some the of amendments.
Discussing on the amendments in penalties on failing to furnish returns of income, Senator Farooq H. Naik said that there should be some relaxation to those who could not file their returns due to genuine reasons.
Chairman FBR informed the meeting that the government had added new sections in the Income Tax Ordinance to provide penalty for default of requirements of Points of Sale (POS) system installed by the FBR at the retailer shops. He said that the retailers who might corrupt or temper the system would be fined up to Rs3 million and if even after paying penalty, they continue their corrupt practices, they would be prosecuted and could be jailed or their business could be sealed.
Senator Farooq Naik appreciated the governments’ move of penalties but he disagreed with the idea of prosecution, saying that shutting down of the business would be the most effective way of punishing them. Senator Anwar ul Haq Kakar however said that tax evasion was a serious crime so, such evaders must be dealt with iron hands.
The meeting was informed that the major source of checking the retailers’ activities on POS was the consumers who report to the FBR in case of fake receipt through the prize scheme.
The Committee also approved the proposal for collecting fix tax of Rs3000 to Rs10,000 through electricity bills from the small retailers.
Discussing increase in period of holding immovable property to get exemption from the advance tax, Chairman FBR said this move would discourage dead investments in the country and the investors would be encouraged to invest in progressive businesses.
Senator Talhah Mehmood appreciated this step saying that the government should also create business friendly environment.
The Committee approved the amendment relating to tax on immovable property. It also approved the omission of the section abolishing collection of advance tax from the educational institutions.
The meeting also approved the proposal of prize scheme to promote tax culture. Farooq Naik directed the FBR to further publicize this scheme so that maximum consumers could know about the scheme.
The Committee also opposed increase in withholding tax on capital gains on disposal of securities and recommended to keep the old rate at 12.5 percent across the board.
Minister of State for Finance, Ayesha Ghous Pasha on the occasion, assured the Committee that the government would consider all the recommendation made by the Committee.
The Committee discussed on the addition of new sections with regards to penalties on retailers and approved the addition of sections
