KARACHI: The government has announced some major taxation concessions while conceding to demands of industrialists in a move that may undermine its drive to document the economy, BRecorder reported.
Winding up the ongoing debate on budget in the National Assembly, the Minister of State for Revenue Hammad Azhar has announced to withdraw the Income Tax Commissioner’s powers to raid premises of people on suspicion of hoarding foreign currency and gold.
He announced to relax the definition of nonresident Pakistani for tax purposes. He also proposed to cut the dividend income tax for mutual funds from 25% to 15%.
In a major concession, the government has partially relaxed the condition of seeking CNIC from the manufacturers on sales to unregistered persons. Hammad proposed that the manufacturers will not be required to get the CNIC on sales of up to PKR 50,000.
He further said that no criminal action or tax related penalty will be imposed on industrialists, if they provide wrong CNIC details.
He said the industrialists will be entitled to input tax even if the CNIC number turned out to be bogus. He also announced to reduce the sales tax rate on domestic sales of textile and leather goods by the registered sales tax persons to 14% from the proposed 15%. But it also slapped FED on all imported cars including ones used by middle income groups.
He acknowledged having increased the tax on sugar from 11% to 17% and claimed the move would result in a mere increase of up to PKR 3.5 per kg.
He said his government did not impose any tax on ghee, flour, fruits, vegetables and raw meat and tax had been imposed only on branded corn flour, imported fruits and vegetables and processed meat.
About ghee, he said the govt. had revised a tax on per kg price of ghee but this would not result in any substantial increase in its rate. The NA will approve these measures on Friday along with approval of the Finance Bill 2019.
Towards end of his speech, the revenue minister said the government is ready to discuss charter of economy with the Leader of Opposition Shehbaz Sharif, provided that he is serious about it.