ISLAMABAD: In its ongoing scheme of sessions, the Senate Standing Committee on Finance and Revenue, started clause wise reading of the Finance Bill 2016-17.
The committee will finalize its report by Tuesday and at initial stage the report will only available for the members of the committee and then it will be presented in the House in the form of recommendations in the budget proposals.
According to a briefing paper prepared by the Federal Board of Revenue and available with Customs Today, members of the committee remained critical towards prescribed measures related to revenue collection, tax, sales and income and other issues.
The senators raised objections about advance tax which was paid on the basis of tax calculated on income or minimum tax on turnover and is required to be deposited in four installments. However, advance tax is not calculated on the basis of Alternate Corporate Tax (ACT), but Taxpayers under existing law have to pay entire tax at the time of filing of return. Therefore, committee proposed that Alternate Corporate Tax may also be made the basis for payment of advance tax.
Similarly on a clause related to the rationalizing rates for Capital gain tax on immovable property, committee endorsed the proposal to extend the holding period for taxation of capital gain on sale of immovable property from two years to five years to be charged at uniform rate of tax of 10%.
Moreover on the issue of taxation of property income on gross basis, members proposed separate rates of tax in order to simplify taxation of property income in the case of individuals and associations of persons. Moreover it was also proposed that for such persons the property income may not be clubbed with income under other heads and may be taxed as a separate block of income.
The members of the view that at present a large number of service providers filed sales tax returns with the provincial authorities and not filed income tax returns; therefore, in order to encourage filing of income tax returns, senators proposed that an advance tax at 3% of turnover of no filer service providers be collected by provincial ST authorities along with their sales tax returns.
Moreover, the members were of the view point that at present, companies declared gross loss were exempt from payment of minimum tax at the rate of 1% of turnover. However, this exemption is not available to individuals and AOPs. Therefore, in order to maintain neutrality and to stop misuse of the provision, they proposed that minimum tax may be charged on companies declaring gross loss.
