ISLAMABAD: A Senate panel approved the Rs170 billion mini-budget on Thursday by a vote of 3-2, but they also suggested that the government cut the projected federal excise duty rates on juices in half to allay sector worries.
A proposal to allow the Federal Board of Revenue (FBR) to raise taxes through notifications without first getting Parliament’s consent was also condemned by the Senate Standing Committee on Finance.
Senator Saleem Mandviwalla of the Pakistan Peoples Party (PPP) presided over the conference and acknowledged that the supplementary budget bill “would only burden the taxpayers,” recommending that the government take steps to include non-taxpayers in the FBR’s purview.
Only the chairman and three other committee members were present. Senator Mohsin Aziz of Pakistan Tehreek-i-Insaaf (PTI) opposed the mini-budget with certain adjustments, but the committee nonetheless accepted the bill with a 3-2 vote.
To get NA approval for the budget being submitted as part of the agreement with the International Monetary Fund, Finance Minister Ishaq Dar presented the Finance Bill to the NA a day earlier (IMF).
The government’s claim that these actions had a fiscal impact of only Rs170 billion was disputed by Senator Aziz, who asserted that the true annual impact was greater than Rs510 billion.
The general sales tax (GST), which was increased from 17% to 18% by the Finance (Supplementary) Bill 2023, which was introduced in the House on February 15, 2023, also increased the federal excise duty on tobacco, sugary goods, airline tickets, wedding venues, and cement.
Via an administrative decision from the federal cabinet, the government has already implemented the GST rate rise. But as of late, it has suggested giving the FBR comparable authority.
PML-N Saadia Abbasi, a senator, voted against the motion that would have allowed the FBR to raise the sales tax rates covered under the third schedule of the Sales Tax Act.
According to FBR Chairman Asim Ahmad, the government recommended the modification to give the FBR the authority to raise taxes on goods with a retail price because the FBR had not previously been given the authority to do so.
But giving away such authority would be like chopping off the legislators’ hands and putting the country’s future in the hands of bureaucrats who are determined to buy fancy cars despite the economic downturn.
The Aviation Ministry has expressed concerns about imposing a 20% tax on first- and business-class tickets, or Rs50,000, whichever is higher, according to Senator Mandviwalla.
The proposed levy, according to the aviation ministry, is unworkable because ticket prices are not constant and change periodically. Senator Mandviwalla then recommended that a specific sum should be set aside for each destination rather than imposing a 20% tax.
Senator Aziz argued that, rather than raising import duties, luxury goods should simply be outlawed. He claimed that raising tariffs would merely encourage people to smuggle these goods.
Dr. Aisha Ghaus Pasha, Minister of State for Finance, stated that although the government desired to forbid the entry of luxury goods, it was unable to do so due to WTO regulations (WTO).
“The FBR, in coordination with Frontier Corps and other organizations, is striving to prevent smuggling along the western border,” said Pasha. “As far as the smuggling of these expensive commodities is concerned.”
Nonetheless, the FBR is not mandated to guard the international frontiers.