Senate panel approves ‘mini-budget’ by thin majority

ISLAMABAD: The Senate Standing Committee on Finance Thursday approved recommendations about the Finance (Supplementary) Bill 2023 by a thin majority; two senators belonging to the treasury benches voted in favor, while one senator of PTI voted against.

Out of the total 15 members of the panel, only three members — Senator Saadia Abbasi from PMLN, Senator Dilawar Khan and Senator Mohsin Aziz — attended the meeting held under the chairmanship of Senator Saleem Mandviwalla.

The panel granted its assent to the mini-budget in one sitting.

Now the panel will lay down its recommendations before the House on Friday (today) and after getting approval from the Upper House of Parliament, the recommendations would be sent to the National Assembly.

The Finance (Supplementary) Bill 2023 laid in the House on 15th February, 2023 brings about an increase in the general sales tax from 17 to 18pc besides increasing the Federal Excise Duty on sugary items, tobacco, airline tickets, marriage halls and cement.

Senator Saleem Mandviwalla apprised the Finance Division that the aviation ministry had written a letter to the committee and expressed reservations about 20pc tax on business class and first class tickets.

The aviation ministry commented that the proposed tax was not workable because the fare of tickets was not static and varies from time to time.

Mandviwalla suggested that instead of imposing 20pc tax, a definite amount should be fixed for each destination.

The panel was informed that the Ministry of Finance and Revenue had increased the GST from 17 to 18pc on products bearing retail price.

Asim Ahmad, Chairman FBR, stated that the FBR was not empowered earlier to increase the sales tax on these items and that’s why the ministry put forward this bill which resulted in empowering the FBR to increase the tax on items bearing the retail price. Senator Saadia Abbasi rejected this provision of the bill.

Moreover, the chairman committee stated that the sales tax on cellular devices worth $200 to $500 had been increased from 17pc to 18pc, and the sales tax on cellular devices exceeding $500 had been increased from 17 to 25pc.

Senator Mohsin Aziz suggested that the ban should be imposed on luxury items being imported from abroad rather than increasing taxes on it.

Dr. Aisha Ghaus Pasha, State Minister for Finance and Revenue, commented that the ministry intended to put a ban on the import of luxury items but could not do so because of restrictions of WTO and as far as smuggling of these luxury items was concerned, the FBR was in collaboration with the Frontier Corps and other agencies to curb the smuggling of said items through the western border.

Furthermore, representatives of Murree Brewery and Shezan enterprises apprised the committee that the government had increased the FED on sugary fruit juices and squashes from 0pc to 10pc and this sudden increase was not justifiable.

Chairman FBR commented that sugary drinks were injurious to health and owing to the WHO recommendations, the government had increased the Federal Excise Duty (FED) on carbonated water from 13 to 20pc.