ISLAMABAD: The senate standing committee on finance on Friday asked the ministry of finance to come up with complete budgetary measures to get its recommendations after senators pointed to lack of transparency in the budget brief, sources said on Friday.
The committee asked the finance ministry to lay revised document of budget in brief before the august house till next week to get consent of senators on amendments into public finance management amendments introduced through the Finance Bill 2020-21.
The senate standing committee on finance and revenue held its meeting under chairmanship of senator Farooq Naek at the Parliament House to finalise its recommendations for budget 2020/21.
The recommendations will be tabled before the senate and after getting approval of the upper house of parliament then these recommendations will be forwarded to the National Assembly for review to incorporate them into budget or reject them.
However, the recommendations of senate are not binding on the National Assembly under the constitution.
Sources said the senators ‘seriously’ objected over lack of transparency in budget documents and said the ministry of finance did not incorporate all required details including revised
budgetary estimates into budget in brief documents.
“There are some mistakes in the budget brief document so now all the tables in the range of 25 to 30 would be stipulated again and would be published till next week in order to comply with the instruction of the committee,” a top official said after the meeting.
However, the finance committee approved changes into petroleum levy introduced through Finance Bill.
Now, the levy would be charged under Sales Tax act 1990 where the petroleum companies would be required to file their returns on monthly basis and they would have to pay the levy amount accordingly.
Earlier, the ministry of petroleum high-ups told the committee that they were facing a lot of difficulties for collection of petroleum levy as the payment got delayed for several months.
The Federal Board of Revenue (FBR) officials told the committee that the tax profile would be compared with the developed database of the FBR to identify the tax evaders. The committee approved continuation of super tax for banking sector in the next fiscal year.
The committee approved bringing different services into tax net. Services of transport sector, freight forwarding, air cargo, air cargo, manpower outsourcing, hotel, software development, rental, building maintenance, stock trading and mercantile exchange would bear 3 percent withholding tax.
The committee also approved abolishing of 10 withholding taxes in its meeting. The committee deliberated over restriction on deduction of profit on debt payable to associated enterprises. Agreements for the avoidance of double taxation and prevention of fiscal evasion were discussed as well. Special concessions have been awarded to items that are essential during COVID 19 pandemic.
The committee appreciated the measures taken by the FBR to deal with vast consequences of the pandemic.
Omission of collection of advance tax from dealers, commission agents and arhatis by market committees was welcomed. This is an important measure to promote agriculture in the country.
Advance tax on education related expenses has been omitted as well. In an attempt to discourage the use of caffeinated drinks, federal excise duty has been increased from 13 percent to 25 percent. Imported cigarettes, cheroots, cigarillos, cigars of tobacco and tobacco substitutes have been subjected to federal excise duty of 100 percent.
The senate body rejected the amendments to the taxpayer profile, appeal to appellate tribunal, offences and penalties and power to enter and search premises. Clauses related to real time access to information and databases have been disapproved.