Friday Jun 24, 2022
ISLAMABAD: To jack up FBR’s tax collection target by Rs438 billion, increasing it from Rs7,004 billion to Rs7,442 billion for the next fiscal to strike the IMF agreement, the government is exploring options to slap more taxes on salaried and business class, high-income earners, tobacco, beverages, steel and others sectors as the public awaits finalisation of budget 2022-23.
Top official sources said that different proposals are under consideration to further increase the tax burden to jack up FBR collection from the earlier envisaged target of Rs7,004 billion to Rs7,442 billion for the next budget.
Federal Minister for Finance and Revenues Miftah Ismail is scheduled to deliver a wind up speech in the National Assembly on Friday (today) and he was expected to announce additional taxation measures to fetch Rs438 billion into the national kitty to increase the FBR annual target to Rs7.442 trillion.
The government is considering bringing major changes in Section 7E to impose a tax on deemed income, whereas immovable property is excluded and inserted as a capital asset because it might be challenged in superior courts.
Under 7E tax on deemed income, a tax shall be imposed at the rates specified in Division VIIIC of Part-I of the First Schedule on the income specified in this section, for the tax year 2022 and onward. In the section “capital asset” means property of any kind held by a person, whether or not connected with a business, but does not include any stock-in-trade, consumable stores, or raw materials held for business; any shares, stocks or securities; any property with respect to which the person is entitled to a depreciation deduction under section 22 or amortisation deduction under section 24; or any movable asset not mentioned in clauses (a), (b) or (c) above. For a resident person, it is proposed that being a citizen of Pakistan who during the tax year is present in any other country for less than 183 days or who is not a tax resident of any other country.
The salary slabs for income-earning from Rs50,000 to Rs100,000 the tax rate of 2.5% is proposed. On the salary income from Rs100,000 to Rs200,000, the proposed rate is jacked up from 7.5% to 10%. The rates of all other slabs have also been revised upward.
The government is all set to impose 1% Income Support Levy on people and companies earning Rs150 million a year, 2% on those having income of Rs200 million, 3% additional rate has been proposed for the Rs250 million annual income earners and 4% for Rs300 million annual income.
In the budget 2022-23, the government proposed 2% rate for only those earning over Rs300 million a year with the expectation to fetch an additional Rs38 billion into the national kitty. Meanwhile, the FBR placed SRO to slap Regulatory Duty on import of petrol. In exercise of the powers conferred by sub-section (3) of Section 18 of the Customs Act, 1969 (IV of 1969), the federal government is pleased to levy regulatory duty at a rate of 10% on the import of motor spirit (PCT code 2710.1210) with the stipulation that the regulatory duty shall not be levied on cargoes for which LCs had already been opened or were at high seas.
The imports of motor spirit where customs duty at a rate of 10% is paid shall be exempted from the levy of regulatory duty. This notification shall remain in force till the 30th day of June, 2022.
Originally published in The News