NFC to be reconstituted in July: Tarin

Friday, June 19, 2009

ISLAMABAD: Advisor to Prime Minister on Finance Shaukat Tarin has said that the National Finance Commission (NFC) would be reconstituted in July and new distribution formula of resources would be announced within three months time.

Responding to the concerns raised by members of the Senate Standing Committee on Finance here on Thursday, the Advisor said that he had discussed the matter with the Prime Minister and the commission would be reconstituted in July. The members of the Committee wanted within two months the re-constitution of the Commission as well as its first meeting.

Tarin said that after NFC award, four percent CVT on immovable property would be converted into Capital Gains Tax (CGT) on real estate and transferred to the provinces. The committee also wanted that the tax refund cases processing period should be reduced from 90 days to 60 days.

The Senate body on Finance met to take up the recommendations of the members and was attended by the Ministry of Finance and Federal Board of Revenue officials. The advisor apprised the committee that he would be holding a meeting with the representatives of Chambers today (Friday) to address their concerns about budget.

He agreed with legislators that Internally Displaced Persons (IDPs) tax to be treated as advance tax and to be collected in four quarterly instalments during 2009-10 and the final adjustment would be made on filing of final return for the income year.

It was agreed that bonus be taxed during July-September period of 2010-11. The advisor agreed with the legislators that tax could not be imposed with retrospective affect. Tarin said that increase in withholding tax at import stage from two per cent to four per cent would not be applicable on food items and edible oil with a view to keep their prices at a reasonable level.

The advisor opposed imposition of more taxes on telecommunication sector, saying it has promised an investment of $2 billion in its network in 2009-10 and would contribute Rs 110 billion to Rs 115 billion in terms of revenue in the coming fiscal.

He assured the Committee that the government would look into fixing tax holiday period for Independent Power Producers (IPPs) as the members strongly protested against giving them unlimited period of tax holidays, saying they were earning huge profits.

Secretary Finance Salman Siddeque assured the Senator from Swat that the government would look into the matter of discouraging the import of coal. Option to impose 15 per cent federal excise duty on import of coal or regulatory duty was also discussed in the meeting. Senators were of the view that coal reserves in NWFP and Fata as well as in Swat would provide much-needed employment to the people of the areas.

The committee opposed the proposal to allow use of confiscated vehicles to tax authorities. The Finance Ministry agreed that misuse of green channels at international airports should be checked by putting in place exemplary punishment.


(BRecorder)