Senate panel okays Tax Laws (Second Amendment) Bill: Fixed tax scheme gets nod to bring 2m retailers into tax net

ISLAMABAD: The Senate Standing Committee on Finance Thursday approved Tax Laws (Second Amendment) Bill with certain changes, granting approval for introducing a fixed tax scheme to bring two million retailers into the tax net. Under this scheme, the FBR will introduce one-page tax form for retailers.

The Senate panel rejected advance tax of Rs390 per kg on tobacco. However, the committee passed Rs6,500 on tier-1 and Rs2,050 on tier-II one thousand cigarettes.

The Senate Standing Committee, which met under chairmanship of Senator Saleem Mandviwalla here, finalised recommendations on Tax Laws (Second Amendment) Bill, 2022.

The committee rejected the amendment to empower the federal government to bring about new schemes and modification in taxes other than through the Money Bill. It maintained any modification required should be through legislation having representation from the public.

The committee rejected advance tax of Rs390 per kilogram on unmanufactured tobacco. However, it accepted the amendment of increased rate of FED per thousand cigarettes by Rs6,500 and Rs2,050 under tier-i and tier-ii respectively.

The Senate panel approved withdrawal of tax on allowances of officers working abroad. It exempted capital value tax on vehicles of foreign missions, tractors and public transport on their imports. The committee granted tax waiver on public transport till June 2023 through Tax Laws Second Amendment Bill, 2022.

The Senate committee claimed the Anti-Money Laundering Act (AMLA) serves as a source of harassment for the business community. “How come concealment of money, perhaps to evade tax, is a terrorist act or a criminal offence,” the committee stated. It argued that until the offence is established, no notices under the AMLA should be issued.

It was observed the Anti-Money Laundering Act is inclusive of all the laws the parameters of which need to be restricted and recommended to bring reformations in the AMLA to protect the taxpayer community.

The FBR high-ups apprised the committee that concealment of income exceeding Rs10 million comes under the ambit of criminal offence. The Directorate General Intelligence & Investigation (Inland Revenue) apprised the committee there were 354 cases having total value of Rs358.13 billion and fine amounting to Rs0.5 billion.

The panel was apprised Pakistan Customs has been mandated under the Anti-Money Laundering Act, 2010 to investigate/prosecute cases of money-laundering arising from customs-related predicate offences including smuggling, misdeclaration, fraud and trade-based money-laundering and violation of trade policy and intellectual property rights, etc.

It was further apprised it has also been mandated under the Foreign Exchange Regulation Act, 1947 for effective enforcement of State Bank of Pakistan (SBPs) currency regulation regime. Under Section 9 of the AMLA, Customs authorities may issue notices to the business persons/entities against whom evidence/substantial proof of involvement in money-laundering is available.

It was apprised that notices, under Section 9 of Anti-Money Laundering Act, are issued only to the business-persons, entities against whom sufficient evidence is available with the investigation officers after approval by the supervisory officers. The committee showed reservation on serving of notices and said the notices should be served only after an offence is established.