KARACHI: In order to plug revenue leakage thr4ough exploitation of loop holes in the system, President of Pakistan has promulgated Tax Laws (Third Amendment) Ordinance, 2021.

Ordinance has restricted provisional release of imported consignments in case of a dispute regarding the Valuation Ruling in effect.

The Presidential Ordinance has restricted provisional determination of value in those cases where a Valuation Ruling is in field, irrespective of the fact whether any review or revision against that Valuation Ruling is pending.

Moreover, a person aggrieved of the value determined by the Director General Valuation may within thirty days of communication of such order, prefer an appeal to the Member Customs (Policy) who may pass an order annulling, modifying or confirming the order passed by the Director General.

With the promulgation of the presidential ordinance for broadening of the tax base, the government has granted sweeping powers to the Federal Board of Revenue (FBR) for disconnection of mobile phones/SIMs, electricity, and gas connection of non-filers.

The National Database and Registration Authority (Nadra) will also share the exchange of information with the FBR and the potential tax dodgers will be identified through the use of Artificial Intelligence (AI).

The government has also given powers to the FBR to discontinue gas and electricity connections of persons, including tier-1 retailers who are either not registered or if registered, they are not integrated in terms of Section 3(9A) of the Sales Tax Act 1990.

The government has also enhanced extra tax rates on the industrial and commercial gas and electricity connections to the persons, who are unregistered. The government has granted sales tax zero-rating to fat-filled milk, including those sold in retail packing under a brand name or a trademark and also withdrawn on import of fruit from Afghanistan.

Any expenditure in excess of Rs0.25 million by the corporate sector to be inadmissible if not paid through digital mode. The salaries in excess of Rs25,000 per month if paid through digital mode to be admissible expense along with paid through other banking channels.

Under the ordinance, the reduced rate of 16 percent sales tax would be applicable on the supplies made by POS integrated outlets, where the payment is made through digital mode; reduced rate of 14 percent on remeltable scrap imported by steel meltors; reduced rate of five percent on import of electric vehicles on CBU condition and reduced rate of 16.9 percent sales tax on business to business transactions, where payment is made through digital mode. Moreover, the government has excluded steel and edible oil sectors from the charge of Further Tax U/S 3(1A) of the Sales Tax Act, 1990.

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