Rs.175 billion direct, Rs.25bn indirect taxes recommended in budget: FBR
Business
All the proposals are subjected to approval of budget for next fiscal year by the National Assembly
ISLAMABAD (Dunya News) - FBR authorities said that an additional 200 billion rupees in taxes have been imposed in budget 2022-23, 175 billion rupees in direct, whereas 25 billion rupees are indirect taxes.
While briefing about the taxes in the upcoming fiscal year's budget, the Federal Board of Revenue officials have said that the IT sector is on priority for government. GST (General Sales Tax) on IT services are being reduced from 15% to 5%, increasing the threshold of imports from $50,000 to $100,000. The tax rate is reduced for the construction sector and business opportunities for youth would be provided.
The FBR officials further explained that young entrepreneurs under the age of 30 will be exempted from taxes when starting a business. A 50% tax reduction will be given on their income. Tax reductions are being implemented for the agriculture sector, and a five-year tax exemption is being provided for agro-based industries in rural areas. The SMEs (Small and Medium Enterprises) in the agriculture sector are also being given tax reductions on loans.
FBR authorities also stated that there will be flexibility in the square feet criterion of tax on shops. A 5% tax reduction will be given on dine-in and digital payments at restaurants and bakeries. Withholding tax has been increased for the use of debit and credit cards abroad, with a 10% withholding tax on non-filers and 5% on tax filers. The proposal to reinstate the 0.6% withholding tax on cash withdrawals from banks by non-filers has also been floated.
The FBR officials proposed an annual advance adjustment tax of 200,000 rupees on foreign domestic workers. The POS (Point of sale) retailer tax rate for branded textiles, leaders, and sports equipment retailers has been increased from 12% to 15%. The income threshold for Asian cars over 1300cc has been removed. 10% withholding tax has been imposed on bonus shares.
Proposal for imposition of 20% duty on the use of old bulbs has also been made. A tax of 2,000 rupees per fan has been imposed. With the inclusion of an additional 200 billion rupees in taxes, the target of tax collection will reach 9,200 billion rupees. The FBR's tax revenue was projected to be 900 billion rupees for the next year with the inclusion of the mini-budget. 22 billion rupees were also included in the sales tax regime.
The authorities further stated that an additional 170 billion rupees will be obtained in income tax. A 2% tax on the purchase of un-transferable property through foreign remittances is being abolished. A diamond card is being introduced in the category of remittance cards. Diamond cards will be issued to expatriates who send remittances exceeding $50,000 annually.
