Vigo Metropolitano

Main Menu

  • Home
  • Coverage ratios
  • Financial asset
  • Sogo sosha
  • Maximum revenue tariff
  • Investment

Vigo Metropolitano

Header Banner

Vigo Metropolitano

  • Home
  • Coverage ratios
  • Financial asset
  • Sogo sosha
  • Maximum revenue tariff
  • Investment
Maximum revenue tariff
Home›Maximum revenue tariff›‘Unpopular’ tax measures avoided for fear of backlash – Newspaper

‘Unpopular’ tax measures avoided for fear of backlash – Newspaper

By Jacob Castillo
June 11, 2022
3
0

ISLAMABAD: The coalition government’s first budget – and likely the last before the next general election, as the finance minister said a day earlier – avoided unpopular fiscal measures on Friday for fear of a political backlash and pinned its hopes on achieving the higher 16.6% target for the next fiscal year on 5% GDP growth and 11.5% inflation.

The government has also exploited the transactions and high yields of the real estate sector and the profits of the banking sector. There is also some kind of relief granted to the working class and to a few industries like the textile and pharmaceutical sectors.

In line with the proposed plan, as part of the revenue relief changes announced in the Finance Bill, the government aims to give Rs 85 billion to industries and individuals. Of these, Rs6bn was given in customs duties, Rs30bn in sales tax and federal excise duty (FED) while Rs49bn in income tax.

Income tax revenue measures will generate 316 billion rupees, followed by 90 billion rupees from federal sales tax and excise duties and 34 billion rupees from customs duties. The impact on net income will be Rs 355 billion after relief measures have been deducted.

Official documents suggest that real GDP growth at the rate of 3% in the financial year 2022-23 (FY23) will help generate 121 billion rupees, while nominal inflation at 12.8% will bring in 403 billion rupees. additional rupees. The Federal Board of Revenue (FBR) aims to raise additional revenue of Rs 524 billion through the enforcement of these measures.

The cumulative impact of all these measures will be Rs 879 billion to reach the FY23 target of Rs 7 trillion.

Income tax

The Finance Bill proposes a 5pc tax on deemed income from non-performing immovable property. There will be an exemption of one plot, in addition to the deduction of Rs25m from another open plot. The FBR estimates tax collection at 30 billion rupees from this tax alone. Similarly, the rate of real estate capital gains tax was increased by raising the exemption threshold from four to six years.

Revenue collection from capital gains tax is estimated at Rs 40 billion.

Withholding tax has been increased from 1 pc to 2 pc on the purchase and sale of real estate by active taxpayers, and from 2 pc to 5 pc in the case of non-active taxpayers. The FBR estimates to increase the cumulative income by Rs65bn.

The FBR plans to raise 10 billion rupees by levying 1pc of Capital Value Tax (CVT) on liquid foreign assets of Pakistanis, another 8 billion rupees from 1pc of CVT on foreign immovable property of Pakistanis. Pakistani residents and another 10 billion rupees through an increase in the withholding tax on luxury vehicles over 1600cc.

A poverty alleviation tax of 2% was imposed on high income individuals and companies with an income of Rs 300 million or more. The FBR will receive Rs38bn under this heading.

Banking corporation windfall tax has been increased from 39% to 42% which will generate an additional Rs 28 billion. The RBF increased tax rates on the low ratio of bank advances on deposits to income attributable to all investment instruments, including treasury bills. This will generate an additional Rs25bn. The FBR will increase the income tax of privately funded gratuity and pension schemes by Rs 10 billion. The tax rate on commercial imports of raw materials was increased from 2% to 4% to generate 17 billion rupees.

The finance bill introduces a fixed tax of Rs 3,000 to Rs 10,000 for small retailers and Rs 50,000 for special classes – car dealers, precious watches, etc. 000 per month. This will be a full and final tax liability. The FBR estimates that it collects 30 billion rupees from this tax.

The FBR imposed an advance tax of 1pc on foreign transactions by debit, credit or prepaid card for filers and 2pc for non-filers. A reduced rate of 0.25 pc was imposed on computer exports.

For the salaried class, the minimum taxable income was raised to 1.2 million rupees from 0.6 million rupees. The number of salary bands has been reduced to seven from 12 and the maximum rates to 32.5 pc from 35 pc. There will be a relief of Rs47bn for employees.

The minimum tax bracket has been raised from 0.4 million rupees to 0.6 million rupees for small businessmen and women, which will cost 2 billion rupees from the national kitty. In 2018, the PML had introduced similar taxation, but it was later reversed by the PTI government.

The limit of taxable profits on savings certificates, retirement allowances and investments from the Martyrs’ Family Welfare Account has been reduced from 10% to 5%.

The government is offering a five-year tax holiday for filmmakers, in addition to a five-year tax break for new cinemas, production houses and film museums and 10 years for the export of films and dramas, an exemption on the income of cinemas and producers, a withholding tax on film producers and distributors and zero sales tax and customs duty on the importation of cinematographic material.

The depreciation cost of industry and enterprises was changed from 50% to 100% for the first year, and the withholding tax collected at the import stage was made adjustable at all levels when importing. import of raw materials. Passenger carrying vehicle limit increased from Rs5m to Rs2.5m.

Sales tax

The government reduced the sales tax rate from 16% to 15% in the federal capital. All types of seeds, solar panels, tractors, imports and local supply of charity hospitals, UN diplomats and privileged persons, power generation project machinery and temporary imports were exempted from sales tax.

The government imposed a 3pc sales tax on scrap compressors, scrap motors and scrap copper cutting. The FBR estimates to raise an additional amount of Rs9bn.

Customs duty

The government reduced the tariff structure of 10 dye tariff lines and 39 packaging industry tariff lines and exempted agricultural machinery and agro-industrial industrial machinery from customs duties.

A statutory duty of 10% has been imposed on the import of motor gasoline, which will bring in Rs 30 billion. The brush industry and guts/bladders have been exempted from all taxes.

A reduction/concession of duties has been granted on imports by suppliers to the automotive sector, the coating industry, the manufacture of filters, the pharmaceutical sector, flavoring powders, membranes for filtering/purifying water, ivy leaf extract powders, MDF/HDF boards and raw materials for first aid dressings.

The government has reduced duties on raw materials for industries – plywood, veneered panels, footwear industry, LED light/parts.

A customs duty of 11% and an advance customs duty of 2% have been imposed on the importation of synthetic filament yarn, monofilament and staple fiber of polypropylene. Exemption from regulatory duties has been removed on high carbon wire rod. The regulatory duty rate on fiber optic cables has been increased from 10 to 20 pc.

The FED rate has been increased for two packs of cigarettes, which is expected to generate Rs 10 billion in revenue. The FED rate was raised from Rs 10,000 to Rs 50,000 on club, business and first class air travel and on telecommunications services to 19.5pc from 16pc. FED on air travel will increase by Rs3bn while only Rs1bn will come from telecom services.

Posted in Dawn, June 11, 2022

Related posts:

  1. An audit detects irregularities in the Costa Brava water consortium
  2. That the same food industry that manufactures
  3. Nigeria Seeks To Boost Mobile Banking With Fixed Transaction Fees, Telecom News, ET Telecom
  4. Electrified Tata Motors to Roll Small Commercial Electric Vehicle, Auto News, ET Auto

Categories

  • Coverage ratios
  • Financial asset
  • Investment
  • Maximum revenue tariff
  • Sogo sosha
  • TERMS AND CONDITIONS
  • PRIVACY AND POLICY