ISLAMABAD: The Senate Standing Committee on Finance and Revenue overwhelmingly rejected a proposed 17 percent sales tax on formula milk on Thursday, claiming that it would harm children’ growth and health.
For the second day, the Finance Supplementary Bill 2021 committee meeting, led by Senator Talha Mahmood, deliberated at length on the articles of the bill, rejecting most of the tax ideas on the grounds that they would accelerate inflation.
The committee unanimously rejected the proposed 17pc sales tax on articles of jewellery or parts of precious metal from the existing 1.5pc value of gold and 2pc value of diamond plus 3pc of making charges. It was also recommended to retain the existing sales tax regime for the matchbox industry.
It was informed that 80 tonnes of gold is smuggled into the country annually. The Gold Association lamented that Pakistan has no gold import policy and tax system. “Not only gold but also diamonds are being smuggled into the country,” the Progressive Jewellery Group briefed the committee.
The Federal Board of Revenue (FBR) officials informed the committee that the gold economy size is Rs2.2 trillion and around 160 tonnes of gold were consumed annually, but only Rs29bn gold market is declared. “Out Of the 36,000 registered goldsmiths, just 54 pay income tax,” the FBR officials disclosed.
The committee unanimously believed that it needs assurance whether or not, the recommendations of the committee will be acknowledged otherwise it is a futile exercise to spend countless hours debating on the matter without progressive results. “If the financial adviser and his team are not present then who will we put our recommendations to,” asked PML-N Senator Musadiq Malik.
Senator Talha informed the committee members that he has spoken to Finance Minister Shaukat Tarin and he has assured him of giving importance to the committee’s recommendations.
The committee reserved discussion on several clauses on account that the data and statistics may be provided on the revenue generated on the previous regime so that it can be studied minutely to understand the rationale behind the proposed amendments.
Earlier, the Drug Regulatory Authority of Pakistan (DRAP) representative informed the committee that the prices of the registered drugs will not be increased according to the new GST regime. He said the prices of drugs of therapeutic value will not be increased, however, the nutritional value ones will increase by 17pc sales tax.
The committee observed that the solar panels have also been taxed at 17pc, taxes are also being levied on imported bicycles. The committee proposed there should not be any tax on the import of bicycles less than 25,000 units.
The committee rejected 17pc duty on goods for donation to hospitals, educational institutions and other entities. While expressing her reservations Senator Sherry Rehman said people will stop donating such goods to hospitals, schools and other institutions.