ISLAMABAD - Senate Standing Committee on Finance Wednesday rejected the government's proposal of allowing non-filers to purchase motor vehicles with engine power of up to 1300cc and recommended that they should only be allowed to purchase up to 800cc vehicles only.

The Senate Standing Committee on Finance, Revenue, and Economic Affairs which met here with Senator Farooq H Naik in chair also rejected with majority vote the proposal regarding the legalizing of foreign assets with four to two majority. The committee also rejected the proposal of insertion of a sub-section with regard to taking strict action against those who did not declare their offshore assets. The sub section was opposed by Senators Attique Sheikh, Sherry Rehman, Talha Mehmood, and Imam-ud-Din Shouqeen while it was favored by senators Mohsin Aziz and Aurengzeb Khan.

The committee also strongly opposed the tax exemption on the income earned from PSL cricket competition. The committee members said banning the non-filers to purchase motor vehicles was a good move as it helped in expanding the tax net.

However, the committee was told that due to this ban, sale of automobiles had drastically decreased which also impacted the aligned industry and other businesses related to auto sector. Senator Mohsin Aziz said the government should not facilitate a certain sector at the cost of overall country's economy.

Meanwhile, Hammad Azhar informed the committee that the government could earn extra Rs50 billion annually by curbing the smuggling of cellular phones into the country.

He informed that currently more than $1.5 billion worth of mobile phones were being smuggled annually.

"But now by using modern technology, the smuggling of cellular phones would become part of history as all non custom paid phones would be blocked automatically," he remarked.

He informed that in order to facilitate the overseas Pakistanis, various taxes to be collected on import of mobile phones at airport, had been clubbed together and set a fixed amount on certain categories of the mobile phones.

He said an amount of Rs4,000 would be taxed on import of a cellular phone worth of Rs10,000 to Rs 28,000, while on phones with a range of Rs 28,000 and Rs 60,000, an amount of Rs 6,000 would be taxed.

Similarly, Rs8000 would be collected on import of phones valuing Rs60,000 to Rs105,000 and Rs23,000 would be taxed on import of phones with a price range between Rs105,000 and Rs150,000, whereas on mobile phones valuing above Rs15,000 an amount of Rs41,000 would be charged.

He informed that Pakistan was a huge consumer market, world leading cellular companies such as Samsung and Huawei had contacted the government to establish their manufacturing plants in Pakistan.

He informed the committee that the government was launching a pilot project in the federal capital under which small traders and shopkeepers would be taken into coincidence to enter into tax net.

"For this purpose we will simplify the procedure of filing tax returns and would get them registered with the FBR," he said, adding that they would be linked to various certain categories and a fixed tax would be charged on them.

The revenue minister told the committee that after their registration, they would be monitored for few months and if this pilot project would yield good results, it would be launched in all over the country.

Senator Kulsoom Perveen proposed that the FBR must behave politely with the taxpayers and culture of harassment must be discouraged.

Hammad Azhar said there would be no audit and no harassment under this project.

He, however, said the big traders with brand chains were not included in this project.

Minister of State for Revenue Hammad Azhar said in the larger interest of Pakistan's industrial sector, the government had decided to gradually decrease the import duty on raw material of the manufacturing goods to make the local industry more competitive in the world market.

He said the international price of paper used for newspaper had witnessed a sharp increase, therefore in order to reduce the cost of production, the government had proposed to decrease the import duty from 5 percent to zero.  Senator Mohsin Aziz said the government should keep an eye on the fair usage of the imported material used for newspapers.

He said this amendment bill was totally aimed at facilitating business community, promoting ease of doing business, and increasing investment in the country, therefore it must be appreciated.

Earlier, the proceeding of the meeting which was scheduled to be held on 1100 hours in the morning was postponed for few hours due to absence of some higher authority from ministry of Finace and FBR.

Expressing deep concerns over non availability of finance minister, revenue minister, finance secretary, and FBR chairman in the meeting, the committee maintained that passage of money bill was of great importance but the government was showing non-serious attitude on such an important business.

Committee members suggested to postpone the meeting till next day, however, committee chairman Senator Farooq H Naik was of the view that if the proposals and recommendations were not finalized by January 31, the session of the Upper House would have to be delayed till Monday next which would put extra monetary burden on national exchequer.

"We must have to finalize the recommendations by Thursday and submit them in the House on Friday", he remarked.

The meeting was also attended by Minister of State for Revenue Hammad Azhar, Finance Secretary Arif Ahmed, and Federal Board of Revenue (FBR) Chairman Aurengzeb Khan.