ISLAMABAD: The Senate Standing Committee on Finance and Revenue Monday finalized all the recommendations in the budgetary proposals moved by the Federal Board of Revenue (FBR) for the federal budget for the upcoming fiscal year 2018-19.
FBR had moved amendments in the Income Tax Ordinance 2001, Federal Excise Act 2018, and Customs Act 1969.
In the line of FBR’s amendments, the committee approved tax exemption for ten years on the establishment of new oil refinery in the country. The committee also okayed tax exemption on the import of machinery for the establishment of oil refinery. The proposal was moved by PML-N Senator Rana Mehmood ul Hassan with observation that a huge oil refinery was being established at Hub which would meet half of the oil requirements of the country.
The Committee also asked top officials of the Federal Board of Revenue (FBR) to rework tax slabs for the individuals including salaried class before finalising its recommendations for the 2018-19 budget.
The committee, headed by Farooq Hamid Naek, asked the FBR to revisit the impact of revenue while making changes in the taxable slabs for the individuals.
Former secretary finance Dr Waqar Masood, who was invited to assist the committee on the tax related matters, suggested revising the proposed exemption threshold from Rs1.2 million to Rs800,000 for the individuals on the lower side while in the case of higher income individuals the proposed rates should be revised upward to 30pc from 15pc.Another important issue was the revalidation of the previous acts of the FBR exercised under various statutory regulatory orders (SROs). The committee extended legal covers to validate the SROs.
The committee unanimously validated the previous acts — issuance of notifications and orders of the directorate of intelligence and investigation of Inland Revenue. The recommendations will provide legal cover to orders passed, notices issued and actions taken in exercise of power.
The FBR proposal to share information with the National Database and Registration Authority was approved which will help the board in developing profiles of individuals.
The committee recommended to exempt purchase of new cars up to 1,000cc and 10-marla residential plots from the condition of tax filer. However, tax filing condition was made mandatory in the case of commercial property.
Moreover, the committee enhanced the minimum threshold for withholding tax on bank transaction from Rs 50,000 to Rs 100,000 in a day for non-filer. FBR had proposed enhancing the limit of Rs 1 million transaction in a month for the provision of data related to bank transactions of a person in a month to the transaction of Rs 10 million within a month.
Similarly, committee also approved increasing the volume of expenditures from a credit card for the provision of information of customers by the banks to FBR from Rs 100,000 to Rs 200,000. FBR had proposed that only a filer would be authorized for the registration of a new vehicle or a commercial plot of land and committee approved both the proposals.
Committee also endorsed the proposal of FBR of charging tax of Rs 20,000 on a marriage event in a marriage hall in big city and Rs 10,000 in a small city; previously, FBR charged 5% tax on the total billing of an event from the marriage halls but marriage halls used to commit tax evasion through under invoicing.
