Senate body advises FBR to withdraw GST on electricity bills

ISLAMABAD: Senate Standing Committee on Finance Revenue and Statistics on Wednesday recommended the Federal Board of Revenue (FBR) to waive off general sales tax (GST) on all household electricity bills.

Terming the sales tax on household electricity bills unjustified, Senator Col (R) Tahir Hussain Mashhadi said majority of the people, belonging to poor and lower middle class, are already paying huge indirect taxes in the form of GST and other taxes, “so they should be given relief in electricity bills.”

Senator Saleem Mandviwala chaired the meeting of the committee. Mashhadi advised the FBR to raise their direct taxes by collecting taxes from the wealthier on their huge income and provide maximum relief to the common man by rationalising what he said the unjustified GST ratio of 17 percent.

Chairman FBR Nisar Muhammad Khan informed the committee that the government had taken numerous initiatives for bringing reforms in the taxation system. He said in order to bring maximum people in to the tax net the government also imposed withholding tax of 0.4 percent on banking transactions of over Rs50,000 by the non-filers of tax returns.

Khan said the ratio of direct taxes also increased to 41 percent now from 38 percent three years back due to the tax reforms initiated by the present government. Secretary Finance Waqar Masood said the profit rates on national saving schemes were reduced by the government due to the cut in the policy rates by the State Bank of Pakistan.

However, Masood said the government is still offering higher rates on its saving schemes as compared to the market rate. He said 9.12 percent profit rate is being offered on Behbood and pensioners schemes.

Senator Kamil Ali Agha said saving schemes are in the benefit of the government, “so the people should not be discouraged to invest in the saving schemes by reducing profit rates.”

The meeting was also attended by Senators Ilyas Ahmed Bilour, Muhammad Mohsin Khan Leghari, Nasreen Jalil, Sardar Fateh Muhammad Hassani, Islamuddin Shaikh and Mohsin Aziz.