ISLAMABAD: The Senate’s Standing Committee for Finance in spite of absence of Committee Chairman has approved the Reformed General Sales Tax and Flood Surcharge Bill.
The senate committee met without the presence of its chairman Ahmed Ali and thus was chaired by acting chairman Islamuddin Sheikh at the Parliament House on Tuesday
The committee also approved in its amendment of not implementing of Flood surcharge on those individuals earning less that RS 500,000 and increasing of Special Excise Duty on Luxury items from one percent to two percent.
The MQM also tabled its dissension note on the opposition of this bill which stated that govt instead of RGST could earn billions by imposing tax on agriculture sector.
All the four provinces would begin the process of legislation regarding RGST (reformed general sales tax), on 27-28 Nov, as all four Provinces have written agreement regarding the issue, which is assured not to usher in rampant inflation, as generally perceived; as it would not be implemented on basic commodities.
Secretary finance, Salman Siddique informed the committee members that Provincial legislation regarding the issue was complete, during which the Federation also shared its consensus with the Provinces.
It is pertinent to note that Federation has an accord with Provinces over the issue, which assures uniformity in taxation on goods and services.
Speaking on the occasion, the federal finance minister Hafeez Sheikh has assured against any further inflation due to RGST, as it would not be applicable on such basic commodities like fruits, vegetables, medicines, poultry, and education, and also advised to refrain from politicizing the issue (of RGST).
He said that implementation of RGST would win the confidence and trust of Pakistan amongst international institutions, as currently relations with IMF were well under a heavy spell of stalemate. Brushing aside any financial implications for Pakistan if the forthcoming tranche of IMF failed to materialize, he nevertheless warned that it would put a very negative impression of Pakistan on global community, and said that RGST was mandatory for paying back the IMF debt.
He assured that due to uniformity of rate, there were slim chances of corruption in its implementation.
Speaking on the occasion, senator Ishaq Dar said that Mian Nawaz Sharif had addressed all the concerns and reservations in his letter addressed to government, whose reaction had been equally positive.
Debating the issue of RGST, senators Safdar Abbasi and Professor Khurshid Ahmad stressed on withdrawing the proposed Bill from Parliament, over certain flaws, as Provinces and business community/fraternity had severe reservations over the issue, and declared any debate as useless and waste of time without redressing these flaws.
On the occasion, the secretary finance informed that all Provinces would implement their own policies regarding the RGST, while FBR (Federal Board of Revenue) would act as collecting agent.
He also informed that Federation would be responsible for collecting taxes on goods, and services in Federal territory and zones authorized by Provinces.
Replying to a question of senator Haroon, the federal minister expressed government’s ready approval of taxes on agriculture and all sectors, and strongly negated the impression that government was lavishing expenses on non-development factors; however, considering the current security concerns and massive overload of subsidies, it would be premature to expect a major change in situation.
Speaking on the occasion, senator Ilyas Bilour also demanded to include all persons related to agriculture sector, and real estate earning Rs.10,00,000/- should also be taxed , in order to earn more revenue.