Senate panel rejects changes in sales tax on sugar

ISLAMABAD: The Senate Standing Committee on Finance has rejected the proposed changes in sales tax on sugar for collecting at retail price as the opposition members argued that it would hike the sweetener prices by Rs7 to 8 per kg in domestic market.

The panel also rejected imposition of tax on online marketplace. The Senate Standing Committee on Finance also decided to hold meeting with Finance Minister Shaukat Tarin once the panel finalises its recommendations to ensure that its suggestion gets through from National Assembly and become part of the budget for 2021-22.

At one point of time during the proceedings of the Senate panel, Chairman of the committee Senator Talha Mehmood exchanged hot words with PPP Senator Saleem Mandviwalla and said that he knew what kind of agenda he was pursuing in this meeting. Saleem Mandviwalla responded in the same tone and said that he was trying to understand different clauses of Finance Bill 2021-22. The chairman of the Senate panel was perturbed with Mandviwalla because he was blocking all clauses of the Finance Bill.

The committee members took a token walkout and returned after five minutes. The Senate committee kicked-started its deliberations here at the Parliament House for finalising its recommendations on the budget 2021-22. The meeting lasted for almost 4 hours and 30 minutes.

When the meeting kick-started, Sherry Rehman pointed out that the recommendations finalised by the Senate Standing Committee on eve of last budget were not accepted by the National Assembly. Mohsin Aziz belonging to ruling PTI also said that it would be futile exercise if no recommendations were accepted by end of the day. Additional Secretary Budget objected and said that the recommendations related to Public Finance Management (PFM) were accepted by the government. Saadia Abbasi took up the issue of advertisement published in English newspaper and argued that how the FBR was wasting national exchequer for bringing disrespect to the taxpayers.

The Senate panel set aside the whole Finance Bill 2021-22 and decided to take up issue of FBR powers for arresting and prosecuting on concealment of income. Sherry Rehman termed the FBR powers as mini NAB law. The FBR Chairman Asim Ahmed made efforts to defend this change in the Finance Bill 2021-22 and said that the government curtailed discretionary powers and also decided that this clause of law could be invoked only after getting permission of minister in-charge.

The Senate panel decided with majority to omit Section 203 A and B from Finance Bill 2021-22 and only member from treasury benches Mohsin Aziz gave his dissenting vote.

The committee also rejected imposition of GST on online marketplace. Mohsin Aziz made all efforts to convince senators that how tax to GDP ratio could be increased when the parliamentarians oppose documentation of economy drive. Faisal Sabazwari replied that the agriculture sector contributed almost 20 percent into the country’s GDP but its contribution into taxes was negligible. He said that it was put under the carpet by citing it as provincial subject, but there is need to introduce constitutional amendment to bring agriculture income into Center’s domain. He argued that online platforms were at nascent stage so it should not be taxed at this stage.