ISLAMABAD: The Senate Finance Committee rejected the proposal that allows non-filers to procure up-to 1300 CC vehicles and recommended that non-filers should be allowed to purchase vehicles up-to 800cc. In addition to this, committee also rejected the proposal of exempting the Pakistan Super League Franchises from the 10 percent withholding tax.
The meeting of the Senate Standing Committee on Finance held at the parliament house under the chair of Senator Farooq H Naek. Tax officials told committee that franchises are going in loss and their refunds have been increasing. we have just given the Rs120 million to Lahore Qalander.
State minister for Revenue Hammad Azhar and chairman FBR along with the members briefed the panel about the supplementary finance amendment bill2019. Member Inland Revenue policy informed the panel that a new clause inserted in money bill in which an offshore assets of any person, not declared earlier is discovered by the commissioner or any other department or agency of the federal government or a provincial government, tax department while raising the demand, recover the tax from their accounts.
He further stated that addition of section of provisional assessment does not mean that those accounts holders would have exemption from Federal Investigation Agency (FIA) and Anti Money Laundering (AML) Laws.
We have received information of 152,000 offshore accounts and we are sending the notices after completing our work. The member of committee Sherry Rehman objected on the proposal of government and said that it seems that government want to regularize the offshore accounts holders as earlier, governments had been toppled having the offshore accounts. She asked from the officials how this proposed plan is different from the amnesty announced in last year.
On this, Hamad Azhar said that this is not the amnesty scheme and the beneficiaries of amnesty scheme have given legal protection while now, we are tightening the laws. If someone asset discovered, department will not only recover the tax from the Pakistani accounts but request the country to freeze the accounts. If someone proves that money is legal then we will return him, hamad further stated that earlier law was foreign income but now we want this due to early recovery of tax. Senator Ateeq Shiekh and Senator Talha Mehmood said that this is not right how can you deduct the money from someone accounts despite the fact, charges have not framed. The committee also sought opinion of the Law Division and Law Division official stated that “making tax payment of a conceal asset, a person cannot be exonerated from criminal liabilities”.
However, majority of the committee member were not in favour on new section on offshore account, the committee through voting rejected the proposal with majority votes.
State Minister told the committee that government has gathered all the taxes on import of phones and we are hopeful to collect Rs 50 billion through registration and other administrative measures. He disclosed that mobile phones smuggling have reached to Rs 190 billion on yearly basis and there was a dire need to regularize this system. The committee approved the taxes on import of mobile phones. State minister also informed the members that a pilot project for retail sector to register them in the tax net will be launched through simplification of tax return and reduction in tax rate. Small traders, especially shopkeeper were not coming into tax net because of fear of harassment at the hand of tax authorities. Additionally retail sector concern was that process of filing of tax returns was very cumbersome and they could not affords services of lawyers’ and on top of that tax rates are higher.
Azhar added that the government has decided to charge a fixed tax rate on retail sector either on their turnover or on some kind of categorization would be undertaken. We have also assured them that “if the come into tax net, the tax pay by them would be their final liability and they would be exempted from audit. He also told that committee that most of the industries have shifted abroad especially ‘home appliances and shoe industry’ was relocated to China and duty reduction in the supplementary finance bill was proposed keeping in view this aspect.
Earlier, when committee met in the morning session to begin discussion in protest over absence of finance minister, Secretary Finance and Chairman Federal Board of Revenue (FBR) postponed proceedings until afternoon to provide time and opportunity to the senior officials to turn up in the meeting. Minister of State for Revenue Hammad Azhar and Chairman FBR and special secretary finance rushed to the committee meeting after it was conveyed to them that the committee decided not to start discussion in the Supplementary Finance Bill.