ISLAMABAD: The Senate panel on finance and revenue rejected the one per cent increase in General Sales Tax (GST) on Thursday.
Senate Standing Committee on Finance and Revenue voted for the new GST rates ranging from 17 to 26 per cent and four votes were cast against the new rates while three were in favour. PML-N, PML-Q, JI and MQM rejected the proposed increase in the tax rate.
PPP members Senator Islamuddin Sheikh, Senator Sugra Imam and Senator Waqar Ahmad Khan voted in favour of the increase.
Senator Sugra Imam said that the one per cent increase in the GST rate was not anti-poor, adding subsidies should be given on agricultural inputs for poor farmers.
In the new budget, the government proposed to increase the GST rate hoping to generate an additional revenue of Rs33 billion after it failed to implement the Value Added Tax from July 1.
“Has the government searched all areas for generating revenues before resorting to an extreme step,” questioned the Chairman of the standing committee, Senator Ahmad Ali of the MQM.
The committee also unanimously proposed an increase in corporate income tax rate from 35 to 40 per cent.
The committee was of the view that the big corporate sector was earning massive profits so the income tax rate should be increased by five per cent.
“Tax authorities wanted to raise the rate but the government did not agree to the proposal,” said Chairman of the Federal Board of Revenue, Sohail Ahmad.
The committee also unanimously recommended an increase in the pension of judges widows from 50 to 75 per cent. In the budget, the government only proposed an increase in the family pension of government employees but left out widows of judges.
The standing committee also proposed delegation of authority of giving additional privileges to former charimen of Senate and speakers of National Assembly (NA) to finance committees of the Senate and the National Assembly.
These additional privileges include free medical treatment for former Senate chairmen and NA speakers. On Wednesday, the committee had opposed additional perks and privileges to former Senate chairmen and NA speakers.
Published in the Express Tribune, June 11th, 2010
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