The Senate Standing Committee on Finance has directed the Ministry of Finance to calculate the revenue impact of healthy levy for making it a part of the proposed increase in federal excise duty (FED) on cigarettes. A meeting of the panel presided over by Farooq H Naek on Friday held elaborated discussion on serious impact of use of tobacco on heath, specially of youth, and the proposed Healthy Levy on tobacco to discourage its use, and eventually decided with unanimity to make the levy part of the FED on cigarettes.
The committee while opposing the existing raise in the FED on cigarettes recommended that the revenue impact of the Health Levy must be incorporated in the proposed increase in federal excise duty (FED) on cigarettes. The committee has already recommended withdrawal of Health Levy on cigarettes at Rs 10 per kg from manufacturers at time of tobacco purchase. The FBR officials informed the committee that the main purpose of increasing FED on cigarette is not aimed at discouraging the use of tobacco but to generate additional revenue in 2018-19.
The committee recommended that burden of the healthy levy should also be reflected in section 11A of the Federal Excise Act wherein increase in duty on cigarettes has been proposed in the Finance Bill 2018. The Law Division said that the health is a provincial subject, but imposing levy is prerogative of the federal government and is not against the 18th Constitutional Amendment and under the law, it is in the domain of the federal government. The committee approved increase of FED on cement from Rs 1.25 to Rs 1.50 per kg to mobilize additional revenue.
The committee approved the inclusion of exemptions allowed through SROs to CPEC-related projects in the Finance Bill 2018 contingent to providing the copy of PC-1 of the project in which exemption was granted and final audit report on completion of the project. The committee has also approved exemption from FED on commission paid by the State Bank of Pakistan (SBP) and its subsidiaries to the NBP/any other banking company for handling banking services of federal or provincial governments on demands of the SBP.
Senator Kauda Babar staged a walkout from the committee meeting as a protest for allocating disproportionate funds for Gwadar port in PSDP for the next fiscal year.
He said that the government had made Rs 25 billion business plan for Gwadar in 2004 but regretted that since then only Rs 10 billion were released for construction of roads and highways, while owners whose lands were acquired for GDA were not paid any compensation. He further said that the entire amount was utilized for roads and people in Gwadar were facing shortage of basic immunity like drinking water.
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