Islamabad, February 16, 2023 (PPI-OT):The Senate Committee deliberated and discussed the recommendations on Money Bill, which aimed to amend the laws relating to taxes and duties. 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 18 pc besides increasing the Federal Exercise duty on sugary items, tobacco, airline tickets, marriage halls and cement.
Senator Saleem Mandviwalla apprised the Finance division that the Aviation ministry has wrote a letter to Committee and expressed reservations on 20 pc tax on Business Class and First class tickets. Aviation ministry commented that the proposed tax is not workable because the fare of tickets are not static and vary from time to time. Senator Saleem Mandviwalla suggested that instead of imposing 20pc tax, a definite amount should be fixed for each destination.
The Senate body was informed that the ministry of finance and revenue has increased the GST from 17 to 18 p.c. on products bearing retail price. Asim Ahmad, Chairman FBR, stated that FBR was not empowerd earlier to increase sales tax on these items and that’s why ministry put forward this bill which results in empowering the FBR to increase tax on items bearing retail price. Senator Saadia Abbasi rejected this provision of the Bill.
Moreover, the Chairman Committee apprised that the sales tax on cellular devices worth 200$ to 500$ have been increased from 17 pc to 18 pc, and the sales tax on cellular devices exceeding 500$ have been increased from 17 to 25 p.c. Senator Mohsin Aziz suggested that ban should be imposed on luxury item being imported from abroad rather then increasing taxes on it, also this tax will only encourage smuggling of these items.
In Reply, Dr. Aisha Ghaus Pasha, State Minister for Finance and Revenue, commented that the ministry intended to put 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 is concerned, the FBR is in collaboration with Frontier Corps and other agencies to curb the smuggling of said items along the western border.
Furthermore, Representatives of Murree Brewery and Shezan enterprises apprised the committee that Government has increased Federal Excise duty (FED) on sugary fruit juices and squashes from 0 to 10 p.c. and this sudden increase is not justifiable. Chairman FBR commented that sugary drinks are injurious to health and owing to WHO recommendations in this regard, government has increased the Federal Excise duty (FED) on carbonated water from 13 to 20 p.c. however the no tax fruit juices have also been increased by 10.p.c. The Committee recommended that FED on fruit juices should be decreased from 10 to 5 p.c. Similarly, to curtail the usage of tobacco as per the global practices, government has increased tax per thousand cigarettes from 6500 rupees to 16,500 rupees.
Additionally, the FED on per kilogram of cement has been increased from 1 rupee 50 paisa to 2 rupees, Senate body told. While discussing the proposed tax on functions and gatherings, Chairman FBR apprised that the individuals have to pay 10 p.c. tax in advance in order to avail the services of Banquet halls. Saleem Mandviwalla said the majority of banquet halls are now even registered with the FBR, it was further recommended that before imposing tax the government should make efforts for the registration of marriage halls.
Senator Saleem Mandviwalla reiterated that this bill will only burden the tax payers masses of the country. He proposed that government should take measures to bring the non tax payers under the ambit of the FBR. The meeting was attended by Senator Saadia Abbasi, Senator Dilawar Khan, State Minister for Finance and Revenue Aisha Ghaus Pasha, Chairman FBR Asim Ahmad and other senior officers of relevant departments were also in attendance.
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