Senate Panel Rejects 17 Percent Sales Tax on Imported Milk

Senate Panel Rejects 17 Percent Sales Tax on Imported Milk

The Senate Standing Committee on Finance and Revenue has rejected sales tax on imported milk of children.

The meeting of the Finance committee was held under the chair of Senator Talha Mahmood.


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The Federal Board of Revenue has proposed a 17 percent sales tax on imported baby milk in the finance bill which was rejected by the senate finance committee.

The committee not only rejected proposals for additional tax on sweetened condensed milk, yoghurt and cream but also on the import of poultry and biodiesel machinery.

Similarly, the Senate panel also rejected a sales tax proposal on the import of tractors, harvesters and agricultural machinery.

However, the committee approved proposals pertaining to sales tax on imported bangles, 17 percent sales tax on imported milk, butter, curd, ghee and cheese, imported bicycles, and 1 percent sales tax on small electric vehicles.

The committee deferred the discussion on import of aviation industry, aircraft and spare parts, 17 percent sales tax on import of energy saver bulbs and tax exemptions to Ghee industries in FATA and PATA.


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Earlier, while giving a briefing to the Senate Standing committee on Finance and Revenue on budget proposals, the Finance Minister said that the finance bill will be amended and the arrest clause will be changed.

Those who do not appear in the tax net will be arrested but after the approval of a three-member committee comprising the finance minister, special assistant finance minister and chairman FBR, he added.

The Finance minister requested the Senate committee to prepare amendments and I have also asked the law minister to make changes in the Finance Bill in this regard.

He also informed the members that FBR was barred from sending notices. The third-party will not only send notices but also conduct the audit to taxpayers.

The finance minister said that the IMF had imposed very strict conditions in this loan program. The government on the instruction of the lending organization enhanced the policy rate to 13.25 percent which increased the interest on loans from Rs. 1,300 billion to Rs. 2,900 billion.

He also said that the government on the instructions of the IMF raised the electricity and gas prices, which not only pushed up inflation but also affected the industry.

The IMF’s aim was to slow down the economy so that imports could be reduced due to which growth slowed to 2.1 percent, the minister added.

The Finance Minister said that there is a sale of Rs. 100 trillion at the retail level but we only collect Rs. 650 billion in taxes.

We will install point-of-sale machines at the retail level and this would be linked to FBR, he further added that the government will also give rewards to those consumers who will compel the outlets for computerized receipts.


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The Finance Minister said that the government will give tax relief to the ex-FATA and PATA area people till 2023 as they have badly suffered from the war on terror. The case of Azad Kashmir is different and we will not make changes there.

Member of committee Senator Sherry Rehman said that in-direct taxes will further increase inflation.

Senator Sadia Abbasi said that the ground realities are different. The biggest issue is unemployment and the government will have to pay heed to this matter.

Senator Faisal Sabzwari said that the tax on the agricultural sector should be increased.


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The Finance Minister in response to the questions of the members said that two provinces suggested to FBR to collect agriculture tax. The federal government can collect Rs. 60-70 billion tax from the agricultural sector.

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