Regulatory authorities to pay tax on income from fee, penalties
* Will be required to deposit surplus fund in FCF
All regulatory authorities would be required to pay income tax on their entire income from fee charges and penalties—and would be required to deposit this amount in Federal Consolidated Fund (FCF) afterward.
Finance bill has introduced an amendment seeking making legally bound all regulatory authorities to deposit their surplus fund in FCF and get approved budget from Ministry of Finance. There was no mention of deduction of income tax from surplus money of the regulatory authorities before depositing of this amount in FCF in the finance bill.
On the request of the Federal Board of Revenue (FBR), the Senate Standing Committee on Finance on Thursday approved an amendment in finance bill 2011 seeking deduction of income tax on income by the regulatory authorities before depositing the amount of their fees charges and penalties in the FCF.
FBR Chairman Salman Siddique approached the Senate Body, which met in the parliament house on for the second day to review the finance bill, and requested its chairman that a further clarification be made in the proposed amendment introduced in the finance bill. He was of the view that all regulatory authorities like SECP, CCP, PTA, OGRA, PEMRA and PNRA should be bound by law to deduct income tax from their income from fees charges and penalties before depositing the surplus amount in the FCF. Explaining the need for this further amendment, FBR Chairman informed that if the word after deduction of income tax was not included in the proposed amendment, there are chances that regulatory authorities might approach courts against the deduction of income tax.
Federal law doesn’t allow any income tax exemption to any of the regulatory authorities and by virtue of this law they should be legally bound to deduct income tax and then deposit their surplus funds in FCF.
Chairman Committee Senator Ahmed Ali and other members of the committee were in agreement with the view point of FBR and committee unanimously approved the amendment in finance bill 2011. Replying to a request from the Senator Talha Mehmood to increase the customs duty on the import of batteries used by the industrial sector and telecommunication companies, FBR Chairman categorically informed the committee that federal government has decided not to increase customs duty on any product and tariff rationalisation plan under consideration before the government is aiming at reduction in duties in phases for all productive sector. However, Member Customs assured Senator Talha Mehmood that misuse of the tariff structure on batteries would be eliminated through administrative measures and if such types of batteries are being manufactured locally than the tariff structure would be changed to provide protection to local industry in consultation with Engineering Development Board. FBR chief also assured the committee that it would examine the proposal of Tax Compliance Cards for good taxpayers and Tax Privileges Cards to provide the good taxpayers respect and honor in public dealing offices. Daily Times