He repeatedly raised the issue before the committee and inquired about the taxation of files of immovable properties.
The Senate Standing Committee on Finance has also recommended major modifications in the FBR proposal for documentation of economy under which non-filers would not be permitted to purchase new motor vehicles or immovable properties in the country. The committee recommended that the owners of the motorcycles must be excluded from this provision and only vehicles above 1000cc should be covered under the said provision of non-filers. The FBR should not allow non-filers to purchase new motor vehicles above 1000cc. The motor vehicles below 1000cc must be excluded from this provision of the law.
Similarly, non-filers shall not be permitted to purchase property with area of 10 marla or above and all commercial properties be included in the provision without any condition of size of the property.
Under the Finance Bill 2018, non-filers shall not be permitted to purchase property having declared value exceeding Rs 4 million. The non-filers shall not be permitted to purchase new motor vehicles manufactured in Pakistan or new imported vehicles, it added. Dr Muhammad Iqbal informed the committee that the provision is only related to the restriction on purchase of new vehicles by the non-filers.
Senator Mohsin Aziz objected that the FBR is bringing a new law for the non-filers restricting them from purchase of immovable properties and vehicles. But the new law should not be very harsh and it should be gradually restricted to non-filers. A size of immovable property like 10 marla should be specified for non-filers, who would not be allowed to purchase properties.
To a query, he said if the new law of FBR's powers to acquire immovable properties is not incorporated in the Finance Act, 2018, the FBR's city-wise values/rates of immovable properties would continue to operate in 2018-19. Chairman of the Finance Committee Senator Farooq H Naek said, "We have already unanimously rejected the FBR's powers to purchase immovable properties."
During review of the Finance Bill 2018, tax authorities of the FBR informed the Senate Standing Committee on Finance that the prices of high-speed diesel (HSD) would be deregulated and thus tax on dealers margin shall now be collected on ex-depot sale price of HSD (excluding dealers margin) at the rate of 0.5% from a filer and 1% from a non-filer.
During review of the Finance Bill 2018, Dr Muhammad Iqbal informed the committee that the proposal of tax on dealers' margin has been introduced for the taxability of the HSD. At present, OMCs selling petroleum products to a petrol pump operator deduct tax @ 12% from filers and 17.5% from non-filers on commission or discount allowed to a petrol pump operator. As the prices of high-speed diesel are to be deregulated, tax on dealers' margin shall now be collected on ex-depot sale price of HSD (excluding dealers' margin) at the rate of 0.5% from a filer and 1% from a non-filer.
Under section 236HA (tax on sale of certain petroleum products), every person selling petroleum products to a petrol pump operator or distributor, where such operator or distributor is not allowed a commission or discount, shall collect advance tax on ex-depot sale price of such products at the rate specified in division-xva of part-iv of the First Schedule.
The tax deductible under sub-section (1) shall be a final tax on the income arising from the sale of petroleum products to which sub-section (1) applies, it added.
The Senate Standing Committee on Finance approved relief to members of the stock exchange. The Finance Bill 2018 recommended that the tax collected by the stock exchange from its members @ 0.02% on the purchase and sale of shares under section 233A of the Income Tax Ordinance is currently treated as final tax. The tax on commission earned by members of the stock exchange has now been made adjustable.