ISLAMABAD - The Senate Standing Committee on Finance, Revenue and Economic Affairs on Wednesday recommended increasing funds, allocated for power sector in federal budget for the next financial year 2012-13, to Rs 500 billion, as amount of Rs 182 billion proposed in budget was not enough for power generation keeping in view its severe shortage in the country.
The Senate Standing Committee on Finance Revenue and Economic Affairs, which met under the chair of its chairperson Nasreen Jalil, recommended the government to enhance the funds allocated for the power sector to Rs 500 billion in order to increase the electricity production in the country. The Committee members were of the view that Rs 182 billion allocated in the budget is not sufficient to overcome the power crisis.
The Committee reviewed the Finance-Bill 2012 and finalised some recommendations, which would be moved to the National Assembly to be incorporated in the bill. While debating extending tax net on income from all sources, the Committee decided to recommend the government to impose income tax on income above taxable limit from all sources irrespective of any sectors.
Earlier, Senators of two coalition parties (ANP and MQM) of the government exchanged hot words over the issue of imposition of Federal Excise Duty (FED) on luxury items like air-conditioners, as MQM senator recommended to impose Federal Excise Duty on ACs to save electricity, which was opposed by the ANP. The Committee was briefed that government could not impose FED on air conditions, as it has already planned to abolish excise duty in the country.
The Senate Standing Committee has also recommended increasing import taxes and annual tax on the 1600CC cars. The Committee members recommended that government should impose Rs 500,000 duty on imported 1600CC and over 1600CC cars apart from levying Rs 100,000 annual tax on them.
The Committee has also proposed to establish a special directorate to curb the smuggling from Afghan Transit Trade. The Committee also proposed to abolish General Sales Tax (GST) on the import of mining equipment. The Committee proposed that the rate of withholding tax should be reduced from proposed 1 per cent to 0.25 per cent.
Earlier, the Committee proposed increasing import duty on crude palm oil from Rs.8000 to Rs.9000 per metric ton so as to make this duty equitable for the entire edible oil industry. The Standing Committee proposed unanimously to the FBR for formulation of rules on assessment of value of the asset or immovable property in consultation with all the four provinces for imposition of 10 per cent and 5 per cent capital gains tax in order to avoid possibility of litigation.
The Federal Board of Revenue (FBR) briefed that Committee that government would face revenue shortfall of Rs 40 to Rs 45 billion with the reduction of one per cent GST in the country. Similarly, Secretary Finance Abdul Wajid Rana informed the committee that substantial reduction in the existing rate of General Sales Tax would lead to decrease in share of provinces in the divisible pool, which would not be acceptable to them.
The Committee was informed that FBR is working to reform the taxation system and in this regard the government has proposed to reduce GST to 16 per cent from exiting higher duties on several raw materials.
Senator Ilyas Bilour of Awami National Party (ANP) in his remarks opposed the proposal of making Prime Minister Secretariat into educational institute.
However the Senator demanded that government should cut Prime Minister Secretariat budget to Rs 500 million from proposed Rs 700 million in the annual budget 2012-2013.