Senate body rejects IMF-advised 18 percent sales tax on babies’ milk

The Senate’s Standing Committee on Finance, which met with Senator Saleem Mandviwalla in the chair on Saturday, rejected the proposal to levy 18 per cent sales tax on babies’ milk, reported 24NewsHD TV channel.  

The Federal Board of Revenue (FBR) officials, present on the occasion, informed the committee that any relief provided to consumers on milk and stationery items would result in Rs107 billion less tax collection.   

Strongly disagreeing with the suggestion, Senator Sherry Rehman said that at a time when already 40 percent children in the country had stunted growth, it would be a cruelty to raise the tax.  

The truth of the matter, she went on to say, was that no consultations were held on the suggestion at all.

Senator Anusha Rehman was also of the same view that if the proposal was approved, that would amount to an act of cruelty.

Senator Farooq H Naek said there should be separate laws to deal with civil and criminal cases.

The FBR officials said that there was a proposal to charge Kabor Plus-III interest rate from the person who failed to pay the fine on time. To this, the committee members agreed.

Senator Naek was of the view that it was difficult to document the country’s economy unless every person in Pakistan had a bank account.

The FBR officials said that there was also a proposal to levy 10 per cent sales tax on stationery items.

However, they added, if approved, needy families would be provided monetary assistance.

The Board officials further said that there was another suggestion and that was to levy 18 per cent sales tax on the fruits and vegetables imported from Afghanistan.

The proposal was in line with the conditions put forward by the International Monetary Fund (IMF), the officials said, adding the international money-lending organization had urged the government not to grant exemptions.

Senator Naek said that the IMF had asked for 10 percent sales tax on basic food items. “Don’t you think that potatoes and onions are basic components of our diet?” he asked.

The FBR officials replied that both these vegetables were imported items.

“This is not Pakistan’s, but the IMF’s budget,” Senator Naek said aloud.

Reporter: Waqas Azeem