To finalize recommendations on the Finance Bill 2024–25, the Senate Standing Committee on Finance and Revenue convened for its ninth consecutive session.
The committee discussed the Money Bill 2024’s Sales Tax Provisions in great detail during the meeting. The meeting was presided over by Senator Saleem Mandviwalla, and Senators Sherry Rehman, Farooq Hamid Naek, Anusha Rahman Ahmad Khan, Shahzaib Durrani, while Fesal Vawda were among the committee members present. Along with guests from various departments and the Federal Board of Revenue (FBR), Senator Zeeshan Khanzada was invited as a special guest.
The committee added a default surcharge at the rate of KIBOR plus three percent annually, whichever is larger, to the amendment concerning the obligation to pay taxes or incorrect refunds.The committee also suggested using a crossed check, bank draft, pay order, or other crossed banking instrument to transfer the amount of the sales tax invoice from the buyer’s business bank account to the supplier for any transactions over Rs. 50,000, excluding utility bill payments.
The committee’s members voiced their displeasure with the taxes on stationery and necessities, especially the tax on infant milk, saying that it should not be placed on infants. Concerned that the Budget 2025 unfairly burdened the weak, destitute, and impoverished, the committee expressed disapproval, stating that it seemed to be more in line with IMF aims than with national interests.In particular, the committee was vehemently against taxes on stationery items, including colored pencils, pencils, and geometry sets, labeling Budget 2025 as unduly taxed a tagline of 18 percent GST on everything further raising living expenses and lowering public morale.
Concerns about the taxation of medical equipment, particularly endoscopy, cancer, urology, gynecology, and disposable products, were brought up by Anusha Rahman, who also emphasized the impact on healthcare prices. The FBR clarified that the Privilege Council Pakistan (PCP) has the ability to provide such exclusions in response to the committee’s questions regarding the rationale behind tax exemptions given to specific nonprofit hospitals.
The committee also suggested that donated commodities to hospitals run by nonprofit organizations be subject to the same customs duty regulations as goods that are exempt from customs duty.Senator Anusha Rahman suggested varying tax rates depending on import or supply values in her opposition to proposed tax structures for the telecom industry, specifically as they related to mobile and satellite phones.
After a demanding nine days of discussion on the Money Bill 2024, the committee released proposals meant to help the people at large. Important suggestions included eliminating taxes on eight specific stationary products under the Finance Bill 2024, requiring credit/debit card transactions for purchases over Rs. 30,000 to encourage economic documentation, and enforcing standard sales tax rates on solar sector components and mandating price labels for all consumer goods so that buyers may make well-informed judgments.
The identification of companies abusing tax exemptions under the pretense of charitable status, the provision of additional allowances equivalent to 100% of basic pay for disabled individuals (who make up less than 2% of the workforce), and the tax classification of remote workers versus freelancers were other recommendations made.
The committee additionally suggested that, in order to avoid double taxation and promote foreign exchange gains through ESFCAs, corporate debit card transactions be excluded from an additional 5 percent tax.The main goals of Senator Sherry Rehman’s suggestions were to provide clarification on a proposed rise in export taxes and to provide measures to reduce unemployment and poverty, with a focus on the 6.3 percent unemployment rate that affects over 6.3 million people and the 4% of Pakistanis living below the poverty line, 4.3 percent of workers are unemployed, and all consumer goods must have price labels on them so that consumers may make educated decisions.
Other recommendations included identifying businesses that misuse tax exemptions by passing off their charitable status as charitable, offering disabled workers (who make up less than 2% of the workforce) additional allowances equal to 100% of basic pay, and classifying remote workers as freelancers for tax purposes.
The committee also recommended that corporate debit card transactions be exempt from an additional 5 percent tax in order to prevent double taxation and to encourage foreign exchange profits through ESFCAs.Senator Sherry Rehman’s recommendations primarily sought to clarify a planned increase in export taxes and to offer strategies .
