- Shabbar Zaidi says govt will meet tax target through administrative measures
ISLAMABAD: While increasing the customs duty on 2,400 tariff lines, the government has imposed Rs516 billion taxes in the fiscal budget 2019-20.
Briefing on the salient features of budget 2018-19, Federal Board of Revenue (FBR) Chairman Shabbar Zaidi informed that apart from imposing Rs516 billion taxes, the government has also ended Rs300 billion worth tax exemptions to different sectors as well as people.
He affirmed that the government would meet the remaining tax target through administrative measures.
On income revenue measures, Inland Revenue member Dr Hamid Ateeq said, “We have proposed an increase in the tax rate for services sector from 2pc to 4pc of the gross amount of turnover.”
In addition, he said the department has also proposed that the threshold of taxable income may be revised and fixed at Rs600,000 for salaried and Rs400,000 for non-salaried people. “We have to bear around Rs70 billion in losses owing to the previous government’s measures.”
The FBR chairman said that presently, every market committee is required to collect advance tax from dealers and commission agents at the time of issuance or renewal of licences.
“We have proposed to increase tax for Class A dealers and commission agents from Rs10,000 to Rs0.1 million, Class B from Rs7.500 to Rs0.75 million and Class C from Rs5,000 to Rs0.5 million.
Sales Tax and FED
Dr Hamid Atteq said the department has proposed to give exemption from sales tax on imports of plants, machinery and equipment for installation in tribal areas, excluding steel and ghee/cooking oil industries.
The FBR chairman said that the government has proposed to fix an amount of Rs12,500 for A category, Rs10,000 for B category and Rs7,500 for C category brick kilns per month.
In addition, he added, federal excise duty shall be charged at zero per cent on unmanufactured tobacco, as supplied to a registered person who intends to export the same, subject to furnishing of necessary security.
In sales tax and federal excise duty, he said the government has proposed to end the zero-rating on five export-oriented sectors. “We have estimated to generate Rs70 to Rs80 billion in revenues from these sectors.”
Moreover, he said that the rate of FED on aerated waters is proposed to be increased from 11.5pc to 14pc. “The FBR has proposed to end the third tier system on cigarettes.”
He said the government has proposed to increase the sales tax rate from 8pc to 17pc.
The IR Customs member said that an increase in the rate of additional Customs duty for non-essential items has been proposed.