Event Title: Senate Standing Committee on Finance, Revenue and Economic Affairs
Event Date: 2021-06-17
Islamabad (June 17th , 2021) : The meeting of the Senate Standing Committee on Finance, Revenue and Economic Affairs, to consider and finalize the recommendations on the Finance Bill, 2021, under the chairmanship of Senator Muhammad Talha Mehmood, was held here, at the Parliament house, on Thursday. In the meeting, various points of the Finance bill 2021-2022 were discussed in detail.
During the meeting, officials from FBR informed the committee that the government has decided to abolished the tax on the import of point-of-sale machines. Large retail stores will be able to import duty free machines. FBR officials briefed that the Import duty on card reader machine used for credit/debit card has also been abolished. The duty on the raw materials of pharmaceutical items has been also set to zero; officials from FBR briefed the committee. The FBR further apprised the committee that Zero duty has been set on all pharmaceutical items to which Senator Sabzwari commented that medicines should also be cheaper in the country now. The committee summoned the Drug Regulatory Authority on the matter.
The chairperson National Tariff Commission while briefing the committee said that significant relief has been given to various export sectors including textiles in the last two years. So far, more than 2,000 tariff lines have been reduced to zero. Tax duties on all raw materials have been significantly reduced, she further added. Textile exports are targeted to increase by 4-5 billion next year, she informed.
For the promotion of tourism in the country, duty on the machinery and types of equipments have been set duty-free. Senator Sadia Abbasi pointed out that we need Theme-based parks to protect human lives. Tourism is an industry that makes countries stand out, added Chairman Committee. The committee approved the duty waiver clause on tourism.
The FBR apprised the committee that the Regulatory and additional customs duty have been exempted on vehicles below 850 cc vehicles. Duty on import of auto kits has been reduced from 30% to 15% for the promotion of local auto sector, said the officials of the FBR .Commenting on this Senator Mandviwalla said that “the most expensive cars are being made in Pakistan, you are giving duty exemption but there should be a pricing system”, he said. The Committee defers duty waiver clause on vehicles. The duty on Euro 5 has also been reduced; the officials of FBR apprised the committee. The committee summoned the Secretary Petroleum for a briefing on the matter of Euro 5.
Matter of abolishing income tax exemption on Madaraba was also discussed in the meeting. The Committee opposed the decision to abolish Madaraba income tax exemption. The committee recommended restoring the income tax exemption on Madaraba at its previous level.
Member of the FBR also briefed the Committee on the matter; dealing with the Business Accounts. According to the bill, Business accounts will now have to be declared to the FBR. One who does not declare its accounts will be penalized. The minimum fine will be Rs.0.1million and imprisonment. The Chairman Committee sought revised details from FBR regarding tax on transaction.
The FBR also apprised the committee that the customs duty on 240 chemical tariff lines has been reduced. 5% duty on 240 types of raw materials related to pharmas has been also abolished.
The FBR official said that taxes have also been reduced to promote tourism in the country. Duty for adventure tourism has been reduced by 50% and additional duty has been abolished, the officials said. Senator Farooq H Naik showed his disappointment that all relief for tourism was given to hilly areas; he said that relief should also be given for coastal areas in Baluchistan and Sindh. Replying to the reservation of Farooq H Naik, the FBR official said that all this relief was given on the recommendations of the provincial tourism authorities.
The Chairman NTC while addressing the members of the committee said that duty on paper has been reduced this year. Relief has also been given to dairy industry, she added.
The Chairman NTC said that the HRC is not made in our country. At present, the regulatory duty on HRC is reduced from 12.5 per cent to 5 per cent.
Relief has also been given to the steel industry, said Chairperson National Tariff Commission. The duty on those which were 20 per cent has been reduced to 16 per cent, the duty on those which was 16 per cent has been reduced to 11 per cent, added Chairperson NTC.
The officials of the FBR said that there are two categories of manufacturing SMEs (small and medium enterprises), Category One has a turnover of Rs 100 million while Category Two has a turnover of Rs 250 million. Senator Saleem Mandviwalla has expressed objection to the current turnover. The Committee members unanimously said that turnover was 250 million 14 years ago should be increased now. The committee proposed to increase the turnover on SMEs to 400 million.
The committee will meet again tomorrow for further deliberations on Finance bill 2021-2022.