Senate Standing Committee (SSC) on Finance has finalized its recommendations on Tuesday with a significant change slightly raising the tax slab for high-income individuals.
The committee has prepared the proposal which will go into Senate for approval, after that it will be presented to the National Assembly to give it a final nod. However, the Senate recommendations can be refused to include in the finance bill 2018-19.
It was unanimously recommended to revise upward the taxable slab to 25 percent from the proposed 15 percent for higher income-earning individuals.
Earlier in the budget, it was recommended to scale down the tax rate from 35 percent to 15 percent for the individuals including salaried class. The exemption bracket was increased to Rs1.2 million from the previous Rs400,000 per annum, arguing that it will benefit the lower salaried class.
Committee Chairman Farooq Naek supported by senators from opposition parties observed that massive changes in the tax slabs were just to influence the individuals ahead of the general elections. The changes would indirectly increase the incomes of governmental as well as private employees without making changes in salaries in the budget.
Former federal secretary finance Dr. Waqar Masood was invited to assist the committee on tax-related matters; he said the slight changes made in the taxable slabs will help to some extent in saving the revenue loss.
The representatives of Federation of Pakistan Chambers of Commerce and Industry (FPCCI), cigarette manufacturers and Nestle Pakistan were also invited to give their feedback on the budget proposals.
The committee, however, rejected their proposals to included in the Senate recommendations. The senators who represent special businesses made their own specific proposals, which are related directly to their interests, and sailed through the committee successfully.