Senators recommend elimination of tax clause for builders and bringing them into normal tax regime; NA panel agrees provinces must have own agriculture banks to provide subsidies to farmers
ISLAMABAD: The Senate Standing Committee on Finance on Thursday rejected continuation of Super Tax for third consecutive year saying the government had imposed it for one year but now it was being extended to another year, which was unacceptable.
The committee met under chairmanship of Senator Saleem Mandviwalla here at the Parliament House on Thursday in which all senators belonging to both treasury and opposition benches unanimously rejected the Super Tax for the third consecutive year.
Chairman FBR Dr Mohammad Irshad and Member Dr Iqbal told the committee that the FBR had collected Rs25 billion with imposition of Super Tax but its utilization on TDPs was much more than the collected amount.
This becomes part of the Federal Divisible Pool as the government collects 4 percent from banking companies over Rs500 million and 3 percent from other companies. But the senators did not agree to the stance of the FBR high-ups and rejected the Super Tax for another financial year.
The senators recommend elimination of tax clause for builders and bringing them into normal tax regime. The FBR high-ups told the committee that the builders paid peanuts by depositing just Rs110 million in the outgoing fiscal year as they made commitment to pay Rs2 billion but then disappeared.
The senators reminded them that they had opposed fixed tax scheme for builders but the FBR forced them to pass this scheme through Finance Bill 2016-17. The FBR high-ups conceded that it was their mistake so they reversed it in the budget 2017-18.
The senators recommended bringing non-profit organizations under more regulations as Dr Iqbal told the committee that one top ranking executive working in one NPO was getting Rs47 million in shape of salary.
The FBR proposed that if administrative and management expenditures exceed 15 percent of turnover of NPO then they will impose 10 percent tax on remaining funding.
Meanwhile, in a separate meeting, Federal Minister for Food Security Sikander Bosan and other members of National Assembly Standing Committee on Finance criticized the Ministry of Finance and FBR for not catering to the requirements of agriculture sector through this budget.
Chaired by Qaiser Ahmed Sheikh here at the Parliament House, it was noted that each province should establish their own agriculture banks to finance their farmers in their respective areas.
“This is a technical committee and we have tried to maintain the standard of discussions above the party lines,” Qaiser Ahmed Sheikh said, adding, “We need to highlight the flaws and shortcomings for the larger benefit of system and the country.” The committee chairman later asked the special invitee – Sardar Sikander Bosan, Minister for Food Security, to express the concerns of farmers and those affiliated with the rural economy.
The minister highlighted that the FBR had been unfair with the agri-sector by not rationally executing the directives of the prime minister and the finance minister. “Similarly, the banking sector too has been unfair with us, the loans being disbursed to agriculture sector has to highest rate of mark-up, and vast majority of loans are being disbursed to trader and middlemen instead of farmers,” Sardar Sikander Bosan said.
After discussions on the subject, the committee members agreed that the provinces needed to establish their own agriculture banks and provide subsidies to the farmers from their own budget. The other main issue highlighted by the Minister for Food Securities was what he called irrational subsidies on fertilizers.
Pervaiz Malik of PML-N criticised the federal budget 2017-18 and said opposed to the expectations there was nothing for revival of industries in the budget, he referred to the tractors being manufactured in the country.