Standing Committee supports an increase in tax on business class international air tickets.
The Senate Standing Committee is considering the Finance Bill 2022-23 after the government received some written objections to the federal budget from the International Monetary Fund (IMF).
In a meeting of the Senate Standing Committee on Finance, the committee supported raising the tax on business class international air tickets. The committee approved the proposal to increase the tax on business class tickets from Rs 10,000 to Rs 50,000.
FBR officials said that those who identify themselves as privileged should bear the additional tax burden, henceforth business class tickets purchased from Pakistan will be taxed at Rs 50,000.
Senator Talha Mahmood said that tax on business class tickets should be increased from Rs 10,000 to Rs 25,000.
FBR officials said the tax would be levied only on the ticket and not on the value of the ticket while the existing tax on other air ticket categories has been maintained.
In a meeting of the Senate Standing Committee on Finance, the Federal Board of Revenue (FBR) directed all 29,000 jewelers to comply with the mandatory General Sales Tax through Integrated Points of Sale (POS) and more than 2.3 million first class. Gains approval from traders for non-registration for General Sales Tax, failure to link to Point of Sales, and disconnection of their electricity and gas connections.
The meeting, chaired by PPP Senator Saleem H. Mandviwala, was informed that there are 29,000 jewelers in the country but only 22 are registered and connected with the point of sale which is discriminatory.
Tax officials said that all the jewelers and even the traders in small shops fall into the category of first-class merchants due to their valuable and expensive products and all of them have to come under the sales tax net.
FBR officials said that about 2.3 million traders, identified as first-class traders, are currently unregistered and will be taxed at Rs 3,000 a month on the basis of a monthly electricity bill of Rs 30,000. As the bill increases, the monthly tax will increase to Rs 10,000.
The FBR board has also been given the power to increase the tax rate on electricity bills up to Rs 50,000 per month under the new budget. Can also order the disconnection of electricity and gas connections.
During the Senate committee meeting, officials said that the IMF has raised written objections to certain budget measures, especially on personal income tax, in which the limit of taxable income was increased to Rs. 1.2 million per annum. But the income tax rate was reduced.
Senator Mohsin Aziz said that tax relief is being given to big shopkeepers which is a political decision, the salaried class pays more tax even on a low income.
On which the Chairman FBR said that this is a fixed tax which was there before but now its tax rate has been increased. Apart from Tier One retailers, the tax rate has been increased for small shopkeepers.
Senator Mohsin Aziz said that at present shopkeepers are being given huge tax exemptions, it is necessary to tax those who earn a certain proportion of income.
After which the committee sought a detailed briefing from the FBR regarding the sales tax on tier two shopkeepers. On the issue of sales tax on electric vehicles, the majority of members of the committee opposed a 17% sales tax on all-electric vehicles.
The committee members recommended maintaining a 12.5% sales tax on vehicles up to 50 kW, on which the chairman of FBR said that big electric vehicles are being called for but small vehicles are not coming yet.
Senator Farooq H Naik said that relief should be given to the poor by taxing the rich as the business grows and jobs are created because of the rich.
