Details of direct, indirect taxes levied in Budget 2022-23

Taxable salary threshold increased from 600,000 to 1,200,000.

ISLAMABAD (Dunya News) – Finance Minister Miftah Ismail on Friday announced changes to direct and indirect taxes for the fiscal year 2022-23.

Details of the direct and indirect taxes as well as tax breaks to different sectors can be view below.

DIRECT TAX:

-Tax rebate for five years to New cinemas, production houses, film museums and 10 years for film and drama export.

-Income Tax exemption to Cinemas and producers

- Exemption of 8% withholding tax to film producers and distributors

- 0% sales tax and customs duty on import of film equipment - Taxable salary threshold increased from 600,000 to 1,200,000

- Taxable threshold for AOPs and business individuals increased from 400,000 to 600,000

- Tax rate on income from behboob certificates reduced from 10% to 5%

- Fixed tax introduced for small retailers ranging from Rs. 3000 to 10,000 which will be collected through Electricity bills which will be full and final tax liability.

- Initial depreciation rate increased from 50% to 100%

- Tax collected at import stage made adjustable rental income on second property having value more than Rs. 25,000,000.

- Advance tax will be 2% of value in case of electric vehicles

- Advance tax for non-filers increased from 100% to 200%

- Windfall gain tax on banking companies increased from 39% to 42%

- Any citizen who is not resident in any country will be considered resident of Pakistan

-Advance income tax of 1% on foreign transactions through debit/credit/prepaid card while 2% will be collected from non filers.

INDIRECT TAX:

- Sales tax exemption on import and supply of solar panels

- 0% sales tax on agricultural machinery and seeds

- Sales tax exemption on electricity and local supplies to Non-profit hospitals having 50 beds or more

- Revamped a taxpayer friendly ADRC for tax demands of 100 million or more.

- 0% Customs duty on agricultural related machinery.

- Capital gain tax structure changes from 4 years holding period to 6 years holding period.

- Advance tax increased form 1% to 2% for filers and 5% for non-filers.

- 2% additional tax on persons having incomes of Rs300 million or more

- Advance tax increased on cars of more than 1600cc.

- Customs and regulatory duties on approximately 400 tariff headings on industrial and manufacturing sector have been rationalized.

- Regulatory duties imposed to protect indigenous industries.

- Tariff rationalized on synthetic yarn.

- More than 30 active pharmaceuticals ingredients have been exempted from Customs duty