Senate committee rejects 17% sales tax on baby milk and gold – Business
ISLAMABAD: The Senate Standing Committee on Finance and Revenue on Thursday unanimously rejected the proposed 17% sales tax on infant formula, saying it would affect the growth and health of infants.
Deliberating at length on the clauses of the Supplementary Finance Bill 2021 for the second day, the committee meeting, chaired by Senator Talha Mahmood, also rejected most of the tax proposals on the grounds that they will accelerate inflation.
The committee unanimously rejected the proposed 17pc sales tax on jewelry or precious metal coins from the existing 1.5pc value of gold and 2pc value of diamond plus 3 pc manufacturing fee. It was also recommended to retain the existing sales tax regime for the matchbox industry.
He was informed that 80 tons of gold are smuggled into the country every year. The Gold Association lamented that Pakistan has no gold import policy or tax system. “Not only gold but also diamonds are smuggled into the country,” the Progressive Jewelery Group told the committee.
Rejects tax on donations to educational institutions and other entities
Federal Board of Revenue (FBR) officials informed the committee that the size of the gold economy is 2.2 trillion rupees and about 160 tons of gold is consumed each year, but the gold market of only 29 billion rupees is declared. “Of the 36,000 registered goldsmiths, only 54 pay income tax,” FBR officials revealed.
The committee unanimously believed that it needed assurance whether or not the committee’s recommendations would be recognized, otherwise it is an exercise in futility to spend countless hours debating the issue without progressive results. “If the financial adviser and his team are not present, who will we make our recommendations to,” asked Senator PML-N Musadiq Malik.
Senator Talha informed committee members that he has spoken to Finance Minister Shaukat Tarin and assured him that he will take the committee’s recommendations seriously.
The committee reserved discussion on several clauses due to the fact that data and statistics can be provided on the revenues generated by the previous regime so that they can be studied thoroughly to understand the rationale for the proposed changes.
Earlier, the representative of Drugs Regulatory Authority of Pakistan (DRAP) informed the committee that the prices of registered drugs will not be increased as per the new GST scheme. He said the prices of drugs with therapeutic value will not be increased, however, those with nutritional value will increase by 17% sales tax.
The committee observed that solar panels were also taxed at 17%, taxes are also levied on imported bicycles. The committee proposed that there should be no tax on the importation of bicycles under 25,000 units.
The committee rejected the 17% tariff on goods intended for donation to hospitals, educational institutions and other entities. While expressing her reservations, Senator Sherry Rehman said people would stop donating such goods to hospitals, schools and other institutions.
Posted in Dawn, January 7, 2022