ISLAMABAD: The Senate on Thursday adopted 27 recommendations related to Finance Bill 2022 and proposed multiple recommendations on the public sector development program.
The recommendations on the Finance Bill, 2022 would be forwarded to National Assembly which would decide whether or not these recommendations are to be incorporated into the money bill.
At the Senate sitting, Chairman Senate Standing Committee on Finance, Revenue, and Economic Affairs Saleem Mandviwala presented his report on the Finance Bill 2022 that was adopted by the House. Senate Chairman Sadiq Sanjrani presided over the sitting.
Speaking on the floor of the House, Saleem Mandviwala appreciated the role of all members of the Standing Committee and the team of the Ministry for extending their support to the finance panel in preparation of the recommendations.
The Senate recommended to the National Assembly that this act is against the principle of Sales Tax and Value added tax and as such sales tax should be collected from all the sales points. However, exemption on the real small retailer i.e. with shop size of 6×6 or 6×8 non air condition retailer should be based on their electricity bill.
The Senate recommended to the NA that retrospective exemption of Federal Excise Duty to Newly Merged Districts should be provided and in order to promote economic prosperity and implement the true spirit of the exemptions promised, all previously uncollected taxes on sales including electricity bills to also be exempted for the year 2019 to 2020. With the Passage of the 25th Constitutional Amendment, FATA and PATA stood merged in the provinces of Khyber Pakhtunkhwa and Balochistan. A phased approach was needed for the full application of fiscal law to erstwhile Tribal/Newly Merged Districts (NMDs) therefore a decision was made to exempt all taxes which would have not applied had Article 247 of the Constitution not been omitted under the Constitution (Twenty-Fifth Amendment) Act, 2018. However, against the spirit of this decision, Federal Excise Duty was imposed in NDMs bringing the excisable goods produced in these areas under the ambit of taxation. Furthermore, FED was also imposed on the steel sector and ghee sector.
The Senate recommended to the NA that government should ensure the reduction of sugar content in sodas, juices energy drinks, and iced teas for better human health.
The Senate recommended to NA that in (Annex-VI (Chapter 99 of Pakistan custom tariff against pct code 9942) for the words ‘special area government”, the word “Such states and territories as are or may be included in Pakistan shall be substituted.
The Senate recommended to the NA that exemptions of the fifth schedule to the Customs Act, 1969 should be provided on the import of Railways items, from all duties and taxes.
In Sub-Clause (59), in paragraph (a) of Finance Bill, 2022, in the twelfth schedule, the Senate recommends to the NA that all price-sensitive items should be added along with the entry related to coal in the table.
The Senate recommended to the NA that to give full effect to the amendments made in clause 3 (120 (B) of the Bill, 2022, it is proposed that tariff headings 9801.2000, 9801.5000, and 9805.8000 may be restored in the first schedule to the Customs Act, 1969 as were existing before its withdrawal vide Finance Act, 2018.
Senate recommended to the NA that the provision of section 37 of the Income Tax ordinance, 2001 omit Capital Gain Tax on immovable property or the amendment proposed in section 37 of the Income Tax Ordinance, 2001 vide Clause 5 (10) (a) of the Bill, 2022 may be withdrawn as it amounts to encroachment upon the provincial domain contrary to the provisions of the Constitution.
The Upper House also recommended to the NA that the aforesaid provisos to sections 60 A and 60 B may be omitted in line with the Sindh High Court judgment date 12.02.2018 in CP No.1313 of 2018.
The Senate also recommended to the NA that the FED rate on natural gas (PCT heading 2711.2000) be enhanced from Rs. 10/- per NMBTU to Rs. 20/- per NMBTU in view of the increase in the prices of Natural Gas since 2010.
Senate recommended to the NA that FED at 5% ad valorem be levied on Crude Petroleum Oils (PCT) heading 2709.000) and, with a view to avoiding any possible effect on the retail price of POL products, this FED may be collected in sales tax mode by adding Crude Petroleum Oils (PCT heading 2709.000) in the Table of the second schedule to the Federal Excise Act, 2005.
The Senate also recommended to the NA that the import of aircraft and its parts should be exempted from sale tax as neither this sales tax is recoverable nor adjustable.
Senate recommends to NA that Senator Muhammad Talha Mahmood Foundation should be added in the 2nd schedule for exemption of income tax like other non-profit organizations have been given.
The Senate also recommended to the NA that the percentage salary increase from grades 1 to 16 should be greater than the percentage salary increase for grades 17 to 22.
