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June 22, 2021

Budget 2021-22: Senate body for raising govt employees’ salaries from 10pc to 20pc

ISLAMABAD: The Senate Standing Committee on Finance has unanimously recommended to the government to increase the salaries of government employees from 10 to 20 percent in the budget for 2021-22.

The Senate Standing Committee on Finance and Revenues held its meeting under the Chairmanship of Senator Taleh for finalising recommendations on budget 2021-22 here at the Parliament House on Monday.

Senator Sherry Rehman asked to abolish the petroleum levy of Rs 20 per liter and slashing down the ratio of indirect taxes. Chairman of Senate Panel, Senator Taleh Mehmood grilled the FBR for sending highly unwarranted tax notices to the tune of Rs 1,500 billion to taxpayers and said there was turnover of Rs 50 million but the FBR issued tax notice of 650 million to one taxpayer.

He directed the FBR to furnish details of all those tax notices served in the last six months. He suggested to hand-cuff those officers, who had issued wrong tax notices to the businessmen.

Former President Federation of Pakistan Chambers of Commerce and Industries (FPCCI) Mian Anjum Nisar, appeared before the Senate panel, along with representatives of different industries, and said that the cost of doing business had gone much higher as cost of electricity per unit in Pakistan stood at 16 cents while it was available at rate of 7 cents in comparable economies, while mark-up rate stood at 7 percent and it was hovering around 3 percent in China and India.

He deplored that the government had signed the Free Trade Agreements (FTAs) without even thinking and cited an example that under the FTA phase-1 Pakistan had granted incentive on 35 percent but in second phase this incentive was increased to 70 percent trade regime. “There is no systematic cascading formula implemented in the tariff rationalisation process,” he added.

Mian Anjum Nisar criticised NAB and said they were fed up with the excessive attitude meted out by NAB to the businessmen.

Senator Kamil Ali Agha said that there was a need to bring a paradigm shift in the audit system as through the existing system the blackmailing of taxpayers was done to extort money. Chairman of the Senate Panel Senator Taleh Mehmood pointed out that the FBR had sent over 1,500 billion tax notices in the last six months and directed the FBR to furnish details of all sent notices till July 15, 2021, as this issues could not be allowed unnoticed.

Senator Saleem Mandviwalla said he would furnish details of all those in writing who were picked up by NAB and then forced to ensure plea bargain. He had visited Lahore and personally heard stories of victims, who had faced tortures of NAB.

The business leader from Rawalpindi Chamber of Commerce and Industries Sohail Altaf also spoke before the meeting and said the FBR proposed 203-A and B should be abolished and termed it a black law. He also suggested that the tax should be reduced to 850cc on vehicles instead of cars only.

The Senate panel unanimously recommended that the prime minister should honour the appeal of the Pakistan Dairy Association (PDA) to restore the zero rating regime on milk and other 45 nutrition- based products as well as restoring the previous Sales Tax of 10 percent on value added dairy products.

The representatives of flour mills, jewelers, soybean seeds, poultry and others warned that the prices of these items would go up as the FBR slapped standard GST at rate of 17 percent. The Pakistan Vanaspati Manufacturers Association (PVMA) stated 127 units, out of 137, would be closed down if the taxation measures taken by the government were not reversed.

PSMA President Iskandar Khan said that the FBR placed sugar into a third schedule and imposed 17 percent GST so that sweetener prices would be reduced in the market. He said that the FBR reduced Regulatory Duty on export of ethanol in the budget. The FBR’s high-ups replied that the European Union raised the issue of reducing RD on molasses because they granted duty free access so the government reduced RD in this budget.

The committee asked the FBR to furnish a letter of EU before the committee as 12 units were established to export it from the country.

The Senate panel also recommended to the government to raise FED plus, Rs 25 per pack on tier-1 cigarettes as it will generate additional Rs 13 billion while on tier-2 the FED plus Rs 15 per pack should be increased to generate additional Rs 50 billion.

However, the Senate panel did not recommend anything against illicit cigarettes in their finalised suggestions.