Govt proposes Rs264bn in new taxes in the budget 2021-22

ISLAMABAD: The federal government has proposed Rs264 billion in new taxes in the budget for the fiscal year 2021-22.

Federal Board of Revenue member Tarique Chaudhry informed that FBR has proposed new policy measures in income as well as sales tax and federal excise duty.

FBR proposed Rs52 billion new taxes in customs, Rs215 sales tax & federal excise duty and Rs116 billion in income tax; on the other hand, they have also proposed Rs42 billion relief in customs, Rs19 billion in sales and FED, and Rs58 billion in income tax, leading to the overall collection of Rs264 billion in taxes in the next fiscal year.

A member of Inland Revenue said that the tax department has also proposed Rs242 billion enforcement measures in the budget 2021-22.

The government has assigned an Rs5.829 trillion revenue target in the next fiscal year.

“We will achieve Rs4700 billion during the outgoing fiscal year and if we add 8.2 percent inflation, besides adding the above-mentioned policy measures, then we can collect Rs5829 billion in tax in next fiscal year,” the IR member informed.

While explaining the income tax revenue measures, he said that the tax department will charge 7.5 percent adjustable tax to non-active taxpayers whose electricity bill is more than Rs25,000 in residential areas.

We estimated to collect Rs1 billion from this measure, he added.

Similarly, to discredit the “on” money concept, it has also been proposed to collect tax from those who did not book the vehicle but purchased it later.

He also said that IR has added some sectors, such as Pharma, poultry, animal feed and edible oil, in the withholding of dealer as well as distributor list and it has been proposed to take income tax from them.

He said that they will collect Rs20 billion from streamlining procedures and automation of business processes for monitoring withholding taxes.

In addition, they have estimated to collect Rs10 billion from property income as well as those immovable properties which value is less than Rs5 million.

He said that FBR has estimated to collect Rs5 billion tax for export of services at per with export of goods which will be taxed at the rate of 1 percent under final tax regime.

As per the finance bill, it has also been proposed to take withholding tax on rental income of sub-leases.

Besides this, IR member Tariq Chaudhary informed that they have proposed to give Rs58 billion income tax relief, for which IR will delete 12 withholding taxes, such as payment of royalty to residents, tax on more than Rs50,000 cash withdrawal, tax on banking instrument, tax on banking transactions other than through cash, tax from persons remitting amounts abroad through credit or debit card or prepaid cards.

In addition, it has also been proposed to end the tax on domestic air travel, tax on extraction of minerals, tax from members of a stock exchange registered in Pakistan, tax on marginal financing by NCCPL, tax from CNG stations and tax on certain petroleum products.

Chaudhry said that the tax department has also proposed to impose federal excise duty at the rate of Rs1 on mobile phone calls exceedings three minutes. Similarly, it has also been proposed to impose FED on internet data usage at the rate of Rs5 per GB.

We have an estimate to collect Rs70 billion from this tax, he added.

He added that Customs have estimated to collect Rs1 billion tax by the imposition of FED on electronically heated tobacco.

Ali informed that they have proposed to increase regulatory duty on prepared food, animal food, perfumes, cheeses, hair shampoo and many others as these come into luxury items.

Similarly, he said that they have also proposed to increase the import duty on mobiles to promote the local industry. Pakistanis have imported Rs270 billion worth of mobile phones in the last year, and the government not only wants to promote the local industry but also the export phones, he explained.

Besides this, he said that FBR has proposed to reduce CD on 584 tariff lines including cotton, woven to incentivise the textile industry.

He also said that the tax department has also proposed to reduce duties on goods related to tourism, footwear, paint and chemical and artificial leather industries.

Hamid Ali also said that the government has decided to end taxes, including CD, on the import of 850CC vehicles. We are not only expecting a decrease of Rs200,000 in vehicles prices up to 850CC but to attract the new investors

The IR member said that FBR has proposed to levy sales tax on the retail price of sugar as it would be transferred into the third schedule.

Moreover, it has also been proposed to collect sales tax on the sales of used lead batteries as it is an unorganized sector.

He said that we have also proposed to withdraw zero ratings from petroleum crude oil, parts and components of zero-rated plant and machinery, import of plant and machinery by the petroleum and gas sector, and supply, repair, and maintain ships.

IR member informed that it has also been proposed to increase the sales tax on potassium chlorate from Rs80 per kg to Rs90 per kg in addition to the 17 percent standard rate.

IR member policy said that there we have also proposed to collect sales tax on the sales of goods through online marketplace besides the tax department also proposed to get a license from every brand.

According to the Finance Bill, it has also been proposed to reduce taxes on the export of services from 17 to 16 percent in Islamabad capital territory.

- Advertisment -

Must Read

Imran threatens street protests if polls not held in 90 days

Reveals Gen Bajwa pressurized him into friendly relations with India Says Qureshi, Elahi tasked with establishing contacts with other parties LAHORE: Pakistan Tehreek-e-Insaf (PTI)...