News
Friday, April 29, 2011
Senate committee proposes tax on assets, agriculture income
* Rejects proposed restoration of wealth tax
By Sajid Chaudhry
ISLAMABAD: The Senate’s Standing Committee on Finance on Wednesday rejected the proposed restoration of wealth tax, and asked the Finance Ministry to levy tax on assets and income from agriculture production for resource mobilisation in the federal budget 2011-12, members of the committee informed Daily Times.
The Senate body met in its in-camera session at the Parliament House with Senator Ahmed Ali in the chair and was given a detailed presentation on the upcoming fiscal year’s budget. Federal Minister for Finance Dr Hafeez Shaikh and Finance Secretary Dr Waqar Masood Khan briefed the committee on the proposed initiatives of the budget 2011-12.
The members of the committee, especially Senator Haroon Khan, were of the view that targets fixed by the government in the Budget Strategy Paper 2011-12 could not be met as these had been set without keeping in view the ground realities of the economy.
It was pointed out that after making payment to the International Monetary Fund (IMF), the foreign exchange reserves would come down to $9 billion that would impact the exchange rate and the Pak rupee would further depreciate against major currencies.
The committee members held that restoration of the wealth tax would impose additional tax burden on already tax-paying segment of society.
The Finance Ministry informed the committee that it was just a proposal and its impact was being evaluated and that a decision would be taken after due consultation with all stakeholders, including the parliamentarians.
The members of the committee were appreciative of the asset tax and were of the view that rich who had been concealing their true taxable income and investing in non-productive assets like real estate, shares, investment schemes and stock market should be identified and tax should be imposed on them as punishment for non-productive and non-job creating investment. The committee was unanimous that agriculture income tax should be imposed based on income earned from agriculture activity. The basic Rs 400,000 income should remain exempt and income over and above this limit should be taxed like other incomes.
The committee was informed that the government was considering many options for resource mobilisation but political resistance outside parliament was the main hurdle in tax reforms.
Courtesy www.dailytimes.com.pk