Senate body rejects govt plan to slap PDL at Rs30 a litre

ISLAMABAD: The Senate Standing Committee on Finance on Thursday rejected the government’s plan to slap petroleum development levy (PDL) at Rs30 per litre from July 1, 2018, and recommended sharp reduction for imposing additional levy of just 30 per cent over the existing rate of PDL.

The Senate panel also rejected FBR’s proposal for jacking up rate of further tax to three per cent, asking the government to continue with the existing rate of two per cent in the Finance Bill 2018. The committee also rejected government’s move to impose health levy at Rs10 per kg from manufacturers at time of purchasing of tobacco.

In the Finance Bill 2018, the government has proposed jacking up PDL from Rs8 to Rs10 per litre to Rs30 per litre from July 1, 2018. Now the Senate panel has recommended slapping only additional 30 per cent on existing rate of PDL per litre. It means that the PDL on petrol has been proposed to go up by Rs3 per litre jacking up from Rs10 to Rs13 per litre. It is yet to be unknown whether the government will accept the recommendation of the Senate on PDL or reject it at forum of National Assembly.

The Senate Standing Committee on Finance and Revenues continued its deliberations under the chairmanship of Senator Farooq H Naek here at the Parliament House for finalising recommendations on budget for 2018-19. The finalised recommendations after getting endorsement from the Upper House of Parliament will be forwarded to the National Assembly with the discretion of Lower House of Parliament to accept or reject recommendations on money bill.

The PTI leader, Senator Mohsin Aziz, sternly opposed the FBR’s move to increase rate of further tax from 2 to 3 per cent in the Finance Bill 2018 and stated that the manufacturers were forced to sell their products to 99.9 per cent unregistered buyers. “I will either recommend to jack up this rate to 25 per cent or maintain it at existing level of 2 per cent,” he added.

The committee finalised its recommendation for maintaining the rate of further tax at 2 percent for the budget 2018-19.

It was brought into the notice of the committee that health levy may face legal issues or legal implications as it is neither a federal tax of FBR nor it is a levy governed under a separate law.

Special Secretary Ministry of Finance Noor Ahmed said that the Health Levy proposed through the Finance Bill 2018 was not fiscal measure, and it was taken for the objective of discouraging smoking in the country.

On the proposal of Senator Taleh Mehmood, the committee recommended the FBR to do away super tax from fiscal year 2019-2020 instead of 2020-21. Senator Taleh said that the FBR had proposed Super Tax at time of Zarb-e-Azb in fiscal year 2015-16 and now TDPs had already returned back to their homes so this tax should be withdrawn.

FBR’s Member Tax Policy Dr Iqbal said that the government was still spending money on TDPs, so the FBR proposed phased withdrawal of Super Tax in three year period. The committee finalised its recommendation that the super tax should be abolished in two years.

On another recommendations of Taleh Mehmood, the committee recommended to increase the threshold up to $150,000 on foreign remittances for not raising question from tax authorities. The FBR had proposed threshold of Rs10 billion in the Finance Bill 2018 for not raising question but on exceeding amount the FBR will inquire source of income. The FBR’s member Tax Policy told the committee that 98 per cent remittances were below the limit of threshold envisaged in the Finance Bill.

Senator Musadik Malik, Adviser to the PM said on the occasion that the government proposed amnesty scheme with the sunset clause to restrict indefinite amnesty available at the moment where there was no restrictions on sending money from abroad as no questions were asked about the source of income.