Budget proposals 2014-2015: remittances amount be restricted to $25,000

KARACHI: The private sector has suggested the government to amend the law of ‘unexplained income and assets’ just to restrict amount of remittances to $25,000 even for investment in industrial activities.
As in the existing situation, any amount of foreign outside Pakistan through normal banking channels that is enchased into rupees by a scheduled bank and a certificate from such bank is produced to that effect.
The private sector said that the law would only apply to remittance received by a person for investment in an industrial undertaking and for all other purposes up to an amount not exceeding $25,000 or equivalent to during a tax year.
The amendment has proposed to ensure that the funds remitted under this section do not distort the formal economy.
However, the private sector strongly objects to any tax amnesty schemes or waivers in customs or other duties/levies as it is believed such moves on the part of the government penalizes the formal taxpaying sector.
Moreover, the private sector has proposed an amendment in the law of ‘minimum tax on the income of certain persons’ to revert the minimum turnover tax to 0.5 percent from the current rate of one percent.
It is said that the rate of minimum turnover tax under section 113 of the Income Tax Ordinance, 2001 has been increased to one percent from 0.5 percent through Finance Act 2013.
The private sector said that the amendment will help companies to better manage liquidity.

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