ISLAMABAD, June 5: The Ministry of Law and Justice informed the Senate Standing Committee on Finance on Tuesday that the federal government had been empowered to collect gains tax on the sale of immovable property after the passage of the 18th Amendment.

A meeting of the committee presided over by its chairperson Nasreen Jalil decided to suggest to the government to devise a policy for signing investment treaties.

The committee, which met here in the parliament house to discuss the federal budget 2012-13, directed the finance secretary to draft law so that the royalty being given to multinational companies for investment in Pakistan should have some time limitations or the royalty rate be reduced after a certain period of time.

In her opening remarks, Ms Jalil said the committee was under pressure to scrutinise the budget. “The pressure is from the masses who expected a lot in the federal budget and we have to make recommendations accordingly,” she said.

She said that people expected that the ratio of direct and indirect taxes would be corrected and they would get more relief in the election year budget.The committee discussed a recommendation forwarded by Senator Talha Mehmood over legal status of new tax proposed in the Finance Bill on profits made on the sale of immovable property.

Begum Kalsoom Parveen, Humayun Khan Mandokhel and Haji Adeel supported the recommendation and sought constitutional position on the proposed tax.

“If legal opinion is provided to us on Wednesday we would not press the recommendation,” Mr Talha said after the deputy draftsman of the ministry of law and justice informed the committee that the proposal had been made part of the Finance Bill, 2012 after obtaining legal opinion from the law ministry.

Aqil Usman, Member Legal, Federal Board of Revenue, told the meeting that the FBR had proposed levying gains tax on the sale of immovable assets after obtaining the legal opinion from the ministry of law, He said the federal government could not impose a tax on the value of immovable assets, but gains tax on the sale of property within two years of its purchase was proposed to be taxed in the budget.

Members of the committee raised the issue of applicability of tax laws in all parts of the country, including Azad Kashmir, Gilgit-Baltistan, Fata and Pata so as to eliminate discrepancies.

Officials of the FBR and finance ministry informed the committee that the president of Pakistan had powers to extend the jurisdiction of any tax law in Fata while provincial governors had the powers to extend the tax laws in Pata.

The Azad Kashmir Council and Gilgit-Baltistan Council have the powers to allow applicability of Pakistan’s tax laws in their jurisdictions.

Ms Jalil said the tax laws should be equally applicable in all parts of the country.

ISLAMABAD, June 5: The Ministry of Law and Justice informed the Senate Standing Committee on Finance on Tuesday that the federal government had been empowered to collect gains tax on the sale of immovable property after the passage of the 18th Amendment. A meeting of the committee presided over by its chairperson Nasreen Jalil decided to suggest to the government to devise a policy for signing investment treaties. The committee, which met here in the parliament house to discuss the federal budget 2012-13, directed the finance secretary to draft law so that the royalty being given to multinational companies for investment in Pakistan should have some time limitations or the royalty rate be reduced after a certain period of time. In her opening remarks, Ms Jalil said the committee was under pressure to scrutinise the budget. “The pressure is from the masses who expected a lot in the federal budget and we have to make recommendations accordingly,” she said. She said that people expected that the ratio of direct and indirect taxes would be corrected and they would get more relief in the election year budget.The committee discussed a recommendation forwarded by Senator Talha Mehmood over legal status of new tax proposed in the Finance Bill on profits made on the sale of immovable property. Begum Kalsoom Parveen, Humayun Khan Mandokhel and Haji Adeel supported the recommendation and sought constitutional position on the proposed tax. “If legal opinion is provided to us on Wednesday we would not press the recommendation,” Mr Talha said after the deputy draftsman of the ministry of law and justice informed the committee that the proposal had been made part of the Finance Bill, 2012 after obtaining legal opinion from the law ministry. Aqil Usman, Member Legal, Federal Board of Revenue, told the meeting that the FBR had proposed levying gains tax on the sale of immovable assets after obtaining the legal opinion from the ministry of law, He said the federal government could not impose a tax on the value of immovable assets, but gains tax on the sale of property within two years of its purchase was proposed to be taxed in the budget. Members of the committee raised the issue of applicability of tax laws in all parts of the country, including Azad Kashmir, Gilgit-Baltistan, Fata and Pata so as to eliminate discrepancies. Officials of the FBR and finance ministry informed the committee that the president of Pakistan had powers to extend the jurisdiction of any tax law in Fata while provincial governors had the powers to extend the tax laws in Pata. The Azad Kashmir Council and Gilgit-Baltistan Council have the powers to allow applicability of Pakistan’s tax laws in their jurisdictions. Ms Jalil said the tax laws should be equally applicable in all parts of the country.