The Federal Cabinet on Wednesday approved Tax Laws Amendment Ordinance 2016 to restore the facility of sales tax input adjustment to the provinces as well as signing of multilateral agreements with the OECD countries on tax matters and the Commission of Inquiry Bill 2016 aimed at giving powers to the Inquiry Commission Act 1956.
Briefing the media after the Cabinet meeting chaired by Prime Minister Nawaz Sharif here on Wednesday, Finance Minister Ishaq Dar stated that the tax amendment ordinance for restoring input adjustments to the provinces was placed before the Cabinet for approval after an understanding was reached with the provinces.
The implementation of the law would begin from Thursday and Ordinance would be placed before the National Assembly on September 2.
The federal cabinet, he stated, has authorised him to sign an agreement with Organisation for Economic Cooperation and Development (OECD) in Paris on September 2016 after the country met their compliance criteria and some changes were made in section 107 of the Income Tax Ordinance.
The Minister stated that the Cabinet also approved Pakistan Commissions of Inquiry Bill 2016 designed to give more powers to the 1956 Act – being viewed as toothless to investigate and suggest actions on matters ranging from the fall of Dhaka to the Abbotabad incident.
“Federal cabinet has also approved Property Valuation Amendment Ordinance whose implementation would also start from Thursday,” he said, adding that the government expects a Rs 80-90 billion revenue from revised deputy commissioner rates of immovable property valuation from big cities.
Dar said that there would be no change in petroleum prices next month and the federal cabinet has approved a system of initiation of proposal for fixation of petroleum prices including sales tax.
Oil and Gas Regulatory Authority (OGRA) will put a summary to the Ministry of Petroleum and National Resources which would forward it to the Finance Ministry.
Finance Ministry after keeping in view their social impact would recommend to the Prime Minister an increase or decrease, or neither, in prices.
Petroleum Ministry, he added, also suggested a fortnightly review of the petroleum prices and cabinet meeting approved both the twice a month and monthly review of petroleum prices.
However, he said that in his opinion any review of petroleum prices twice a month would not be possible in near future.
He said the Supreme Court’s decision barring Prime Minister from taking any decision in his personal capacity without cabinet approval has paralysed the executive and the government will go into review against the verdict.
He said the government was also thinking to make changes in the 2001 law of former military rulers because it thinks there must be some limits on sending money abroad through foreign currency accounts.
Dar said the federal cabinet has also authorised Federal Board of Revenue to sign an agreement with Swiss authorities on avoidance of double taxation; various rounds of discussions on the matter have led to initiation of a draft between the two sides.
He said that the Pakistani side has completed its work as soon as the process by the Swiss authorities is completed; an agreement on double taxation would be signed most probably by next year.
Dar said he has never stated that a Pakistani citizen have parked $200 billion in Swiss banks and added he was not aware of any such accounts.
The federal cabinet has approved the decisions of Cabinet Committee on Restructuring and Cabinet Committee on privatization.
The meeting also approved ratification of Economic Co-ordination Committee’s decisions after the recent Supreme Court judgement that Prime Minister or any Minister cannot take any decision in his individual capacity.
The meeting also approved Prime Minister’s Sustainable Development Goals Programme and authorised change of Rs 5 coin metal composition and introduction of Rs 10 coin.
The meeting also approved a proposal of Ministry of National Health and Services on medical treatment of poor/deserving citizens suffering from fatal diseases.
The meeting also approved third protocol to agreement between government of Pakistan and the government of China for avoidance of double taxation and the prevention of fiscal evasion with respect of taxes on income- approval to sign the initialled draft.
The meeting also approved extension of reduced withholding tax rate for non-filers up to 31st December 2016 and the SAARC Agreement of Motor Vehicles and Railways for Intra Regional Connectivity.
The Finance Minister claimed that the tax directory of the Parliamentarians and other taxpayers for 2015 would be published in next two to three weeks because Federal Cabinet has authorised them to do so. -Business Recorder