Federal Finances 2022-23: Feedback & Observations

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**Revenues**
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Tax Revenue 7004
Non-Tax Revenue 2000
Total Revenue 9004
Share of Provinces (4100)
Net Available 4904
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**Expenses**
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Debt servicing 3950
Defence 1523
Pensions 530
Grants & Transfers 1242
Subsidies 699
Running Fed Govt 550
Other Provisions 200
PSDP 808
Total outlay 9502
Shortfall (Deficit) 4589
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INCOME TAX

Tax Threshold

Previously income below Rs 400,000 was not taxable for individuals and association of persons for income other than salaries. Now this limit has been enhanced to Rs 600,000. For salaried persons the threshold has been increased to 1.200.000 however a nominal amount of Rs 100 will be payable by persons drawing a salary above Rs 600,000 in a year.

Furthermore, readjustments have been made within the slabs which increases the overall tax liability for higher income slabs.

Reintroduction of Tax on Wealth

One time Deemed Income Tax on ImmovableProperty-

For the tax year 2022 wealth tax in an indirect method on immovable property situated in Pakistan has been reintroduced. Under the proposed system all immovable property valuing above Rs 25 million (other than a house for own residence) will be subject to a deemed tax. The income for such deemed tax will be 5% of the fair value of such property. The tax rate will be 20% of such income. This means that under the new section a wealth tax at the rate of 1% has been levied under this provision.

In case if the said property is already on rent and tax is paid on actual rent then no such tax under this provision will be payable if the tax paid under the head income from house property under Section 15 is more than the tax payable under the proposed amendment. If not, then the difference will be payable.

The fair market value shall be determined under section 68 of the Ordinance which is the value if any prescribed by the board.

Under Entry 50 of the Federal Legislative List of the Constitution the Federal Government is not entitled to tax capital value of immovable property. This therefore means that this tax is not constitutionally valid and will be struck down if the concept underlined in Entry 50 of the Federal Legislative List is properly appreciated.

This is a good measure to tax undeveloped plots and other such properties, however theConstitutionality issue needs to be settled and it would have been appropriate if such tax was levied by the Provincial Authorities.

For asset outside Pakistan capital value tax at the rate of 1% of the value of the property has been imposed.

Poverty Alleviation Tax

A special tax for tax year 2022, other than income tax has been levied on all persons including companies and AOP’s where the income exceeds Rs 300 million at the rate of 2% of such income taxable under the Income Tax Ordinance, 2001.

Income for the purposes of this tax will be determined on taxable income other than brought forward depreciation, brought forward amortisation and brought forward losses. This provision will also be applicable for income determined under the Fourth, Fifth and Seventh Schedules for insurance, oil exploration and banking companies.

Tax in the similar nature was levied for the rehabilitation of displaced persons which was challenged before the Sind and Lahore High Courts. Both the High Courts upheld the validity of this levy, and the matter is pending before the Supreme Court for decision.

Tax Rate on Banking Companies

Normal tax rate on banking companies has been increased from 39 to 42 percent. This includes the amount of super tax that is included in the rate of 39% as above.

For tax year 2022 and onwards, the taxable income attributable to investment in the Federal Government securities shall be taxed at the rate of—

(i) 55% instead of rate provided in Division II of Part I of the First schedule if the gross advances to deposit ratio as on last day of the tax year is upto 40%.

(ii) 49% instead of rate provided in Division II of Part I of the First schedule if the gross advances to deposit ratio as on last day of the tax year exceeds 40% but does not exceed 50%; andiii) at the rate of 42 if gross advances to deposit ratio as on the last day of the tax year exceeds 50%.

Explanation. – For the removal of doubt, it is clarified that the tax rate under this sub-rule is applicable to total income attributable to total investment in Federal Government securities.

The provisions of Poverty Alleviation Tax shall apply to the taxpayers under this schedule in addition to tax levied as above.

Definition of beneficial ownership

A new definition of ‘beneficial ownership’ for a natural person has been introduced. Beneficial ownership means effective ownership where benefits to ownership lies to a person. Under the definition introduced beneficial ownership has been taken in relation to ownership of shares as well as control and management. In relation to holding of shares a threshold has been fixed at 10% of the shares whereas with references to control and management the concept of effective management has been introduced.

It is important to note that taxation in Pakistan, except that related to tax treaties, has no relevance of beneficial ownership. There is a reference of beneficial ownership in the Asset Declaration laws of 2018 and 2019. Companies and Association of persons have been required to maintain a register of beneficial ownership.

Initial Depreciation Allowance

Under the present law initial depreciation is allowed to the extent of 50% of the value of such assets. This limitation has been removed and now 100% of the amount of initial depreciation will be allowed in the first year.

Definition of Resident

Definition of persons being individuals as residents has been changed. In addition to a person who stays for more than 183 days during a financial year any ‘citizen’ of Pakistan who is not resident of any other country shall be treated as a person resident in Pakistan. There are many cases where many citizens of Pakistan become non-resident only for the reason that their stay in Pakistan is less than 183 days and they are also not the tax resident in another country. This is a reasonable amendment and through this amendment all persons who are citizens of Pakistan become resident in Pakistan if they are not resident of any other country.

In order to reduce or eliminate the abuse of the existing provision even after the amendment it is suggested that the provision as introduced by the Finance Act, 2019 be reintroduced. This is in line with the past practice and applicable in the developing countries. Under that provision the period of stay in Pakistan in the past three year was also taken into account.

Digital Payments

Through the Finance Supplementary Act, 2021 a concept of mandatory payment through ‘digital mode’ was introduced. This provision has been made inapplicable by way of powers conferred to the Federal Board of Revenue. In the proposed Bill the threshold of mandatory digital payments has been increased to Rs 1 million. The term ‘digital payment’ has not been defined under the Ordinance. Nevertheless, unless the earlier notification is withdrawn this provision remains not applicable. It is strongly suggested that these mandatory provisions be re-examined, and appropriate definition of digital payment be in the law.

Tax on Retailers

A new Section 99A, a fixed tax regime for the retailer, other than Tier 1 retailers and specified service providers on commercial electricity connection has been prescribed. The amount collected at the rates prescribed under the First Schedule. This tax will be considered as a final tax on such retailers.

This is not a reasonable law. This means that a retailer will be subject to a very low tax as against salaried and other classes. This is a step that will promote non documentation of the economy. This tax should not be implemented.

Furthermore a retailer who is subject to sales tax under Section (9) of the Sales Tax Act, 1990 will not be required to pay income tax under the Income Tax Ordinance, 2001.

Contribution to retirement benefits

Fifty percent of the contribution to approved gratuity, provident or superannuation fund will not be allowed as a deductible charge.. This amendment is totally unwarranted as there is no case for taxing the contribution to documented retirement benefits.

Share of Member of Association of Persons(AOP)

Where an AOP is taxed the share of its member is exempt from tax in the hands of the member. An explanation has been added in Section 92 of the Ordinance to reiterate the view that there is no tax on the share of income of the member if the AOP has been taxed for such income.

No Carry Forward for Minimum Tax

Previously minimum tax in excess of actual tax was allowed to be carried forward. Now this right has been abolished.

Abolition of certain Tax Credit

Tax credit for investments in shares and insurance, health insurance and contribution to approved provident fund has been abolished.

Recharacterization

Under the proposed amendment made in Section 109 of the Ordinance there will be a recharacterization of the status of a person as being a permanent establishment if the following conditions are fulfilled. Under Section 2(41)(e) of the Ordinance the term permanent establishment includes the following:

A person acting in Pakistan on behalf of the person (hereinafter referred to as the “agent), other than an agent of independent status acting in the ordinary course of business as such, if the agent –

(i) has and habitually exercises an authority to conclude contracts on behalf of the other person or habitually concludes contracts or habitually plays the principal role leading to the conclusion of contracts that are routinely concluded without material modification by the person and these contracts are?

(a) in the name of the person; or

(b) for the transfer of the ownership of or for the granting of the right to use property owned by that enterprise or that the enterprise has the right to use; or

(c) for the provision of services by that person; or”

(ii) has no such authority, but habitually maintains a stock intrade or other merchandise from which the agent regularly delivers goods or merchandise on behalf of the other person; or

Explanation. —For removal of doubt, it is clarified that an agent of independent status acting in the ordinary course of business does not include a person acting exclusively or almost exclusively on behalf of the person to which it is an associate; or

In our view there is no apparent reason for this amendment except being a clarification. The aforesaid activity is already considered as a permanent establishment under Section 2(41)(e) of the Ordinance.

This clause in ordinary situations is overridden by the provision of Agreements for Double Taxation (treaties) with other countries; however, the insertion of the words ‘Subject to Section 109’ which relates to the effectiveness of treaties is expected to raise issues in implementation of the treaty provisions. It is our view that treaties will continue to override notwithstanding the caveat introduced in 2018 by insertion of the words ‘Subject to Section 109’ in Section 107 of the Ordinance..

Foreign Remittance not subject to scrutiny

Under Section 111(4) of the Income Tax Ordinance any remittance through normal banking channel is not subject to any enquiry if the amount is less than Rs 5 million a year. Through an amendment the term normal banking channel has been enlarged to include remittances through money service bureaus, exchange companies or money transfer operators.

This provision can be highly abused if proper documentation procedures are not implemented. Furthermore, through this mechanism the remittances through banking channels are likely to reduce substantially. This is not a good measure.

Separate Notice

Under the law as contained under Section 111 of the Ordinance no addition under this section can be made unless a separate show cause notice is issued for amendment of assessment under Section 122 of the Ordinance. By way of an explanation certain kinds of additions under Section 111 of the Ordinance were exempted from the issue of such separate show cause notice. That explanation has now been amended and effectively all actions under Section 111 of the Ordinance can be made without any separate notice. The items identified for which no separate notice is to be issued are as under:

i. any amount credited in a person’s books of account; or

ii. any investment made or ownership of moneyor valuable article; or

iii. funds from which expenditure was made; or

iv. suppression of any production, sales, or any amount chargeable to tax; or

v. suppression of any item of receipt liable to tax in whole or in part has been confronted to the taxpayer through a notice under sub-section (9) of section122 of the Ordinance.

This is a very regressive provision and is required to be examined as there cannot be any addition on the items referred above without proper opportunity of being heard.

Enforcements against non-filers

A very reasonable provision has been inserted whereby the tax authorities have been empowered to undertake certain actions against persons who are required to file the tax return and have not filed the said return. The action which may be undertaken under these provisions are:

(a) disabling of mobile phones or mobile phone SIMS;

(b) discontinuanceof electricityconnection; or

(c) discontinuance of gas connection.

A complete process has been laid down for this purpose.

Period of Limitation

The period of limitation as laid down under Section 121 which was five (5) years has been changed to six (6) years. Under the present law an assessment can only be reopened within five (5) years after the end of the tax year or the income year to which it relates.

Now this limit has been changed to six (6) years. It is our view that this amendment will not have retrospective effect and those assessments which have already been barred by limitation before this amendment will remain barred by limitation.

Alternate Dispute Resolution Committee

The procedure for alternate dispute resolution has been completely revamped. The salient features are:

  1. The liability of tax of one hundred million and above against the aggrieved person or admissibility of refund, is eligible for ADRC;

  2. The application for dispute resolution shall be accompanied by an initial proposition for resolution of the dispute, including an offer of tax payment, from which the applicant would not be entitled to retract.

  3. The committee shall consist of three members. One from department one by taxpayer and one by consensus.

  4. The aggrieved person, or the Commissioner, or both, as the case may be, shall withdraw the appeal pending before any court of law or an Appellate Authority, after constitution of the committee by the Board.

  5. The Committee appointed shall examine the issue and may, if it deems necessary, conduct inquiry, seek expert opinion, direct any officer of the Inland Revenue or any other person to conduct anaudit and shall decide the dispute by majority, within one hundred and twenty days of its appointment:

  6. The decision by the Committee shall not be cited or taken as a precedent in any other case or in the same case for a different tax year.

  7. The recovery of tax payable by a taxpayer in connection with any dispute for which a Committee has been appointed shall be deemed to have been stayed on withdrawal of appeal up to the date of decision by the Committee or the dissolution of the Committee whichever is earlier.

  8. The decision of the committee shall be binding on the Commissioner and the aggrieved person.

  9. If the Committee fails to decide within the period of one hundred and twenty days, the Board shall dissolve the committee by an order in writing and the matter shall be decided by the court of law or the Appellate Authority which issued the order of withdrawal and the appeal shall be treated to be pending before such court of law or the Appellate Authority as if the appeal had never been withdrawn.

Time Limit for Amendment

The period of one hundred and twenty (120) days for finalising an assessment after a show cause notice has been increased to one hundred and eighty (180) days.

Collection of Tax Import Stage

Under the Finance Act, 2020 the collection of tax at the rates of 1% and 2% by an industrial undertaking on the import of goods for own consumption under Section 148 has been treated as not being the minimum tax. There is another rate of collection of 5.5 % on certain goods imported by industrial undertakings for their own consumption. This collection has been considered as the minimum tax unless a specific certificate or notification is issued. Under the amended law as proposed all imports by industrial undertaking for its own use will not be subject to minimum tax. Nevertheless, this provision will not apply to import of edible oil, packaging material, paper and paper board and plastics. This means that import of such materials by industrial undertaking will remain subject to minimum tax.

Payments by non-residents

Every exchange company licensed by the State Bank of Pakistan are proposed to deduct tax at the time of making payment of service charges or commission or fee, by whatever name called, to the global money transfer operators, international money transfer operators or such other persons engaged in international money transfers or cross-border remittances for facilitating outward remittances.

Every banking company while making payment to card network company or payment gateway or any other person, of any transaction fee or licensing fee or service charges or commission or fee by whatever name called or interbank financial telecommunication services are proposed to deduct tax.

Payment of tax collected or deducted bySWAPS

The Board may, by notification in the official gazette, notify any person or class of persons required to deduct or collect tax under the Ordinance to integrate with Synchronised Withholding Administration and Payment System and to act as SWAPS agent within the time and in the manner as may be prescribed.

The tax collected or purported to be collected or deducted or purported to be deducted under the Ordinance by a notified SWAPS agent and credited to the Commissioner through digital mode, shall be treated to have been paid under section 160 of the Ordinance.

Where tax has been paid by a notified SWAPS agent in accordance with subsection (2) of this section, copy or number of SWAPS Payment Receipt (SPR) shall replace copy or number of Computerised Payment Receipts (CPR) for the purposes of the Ordinance.

All other provisions of the Ordinance, not specifically dealt with in this section, shall, mutatis mutandis, apply to the notified SWAPS agents

Payments from Credit Cards, Debit Cards and Prepaid Cards

Payments from Credit Card, Debit Card or prepaid Card shall be subject to a collection of tax at the rate of 1 and 2 percent for filer and nonfilers respectively. Every banking company shall collect advance tax, at the time of transfer of any sum remitted outside Pakistan, on behalf of any person who has completed a credit card or debit card or prepaid card transaction with a person outside Pakistan

Maintenance of Record

Under Section 174 of the Ordinance a taxpayer is required to maintain the record only for a period of six years. This is in line with the time limitation for reopening of assessment. Now an amendment has been introduced whereby such provisions will not be applicable for cases where there is concealment of income under Section 111 of the Ordinance. The provision relating to concealed Pakistan source income is in line with the time limitation however for concealed foreign source income the taxability is related to year of discovery. When this provision will be read with foreign source income then it means that for such income there is no time limitation for record keeping. This provision in any manner cannot have a retrospective effect as there cannot be any requirement for maintaining the records which have been destroyed relating to foreign source income under the existing provision of law.

Role of NADRA

National Database and Registration Authority (NADRA) shall, on its own motion or upon application by the Board, share its records and any information available or held by it, with the Board, for broadening of the tax base or carrying out the purposes of the Ordinance.

The National Database and Registration Authority may —

(i) submit proposals and information to the Board with a view to broadening thetax base;

(ii) identify in relation to any person, whether a taxpayer or not –

(a) income, receipts, assets, properties, liabilities, expenditures, or transactions that have escaped assessment or are under-assessedor have been assessed at a low rate, or have been subjected to excessive relief or refund or have been misdeclared or misclassified under a particular head of income or otherwise;

(b) the value of anything mentioned in sub- clause (a) of clause (ii), if such value is at variance with the value notified by the Board or the district authorities, as the case may be, or if no such value has been notified the true or market value; and

(iii) enter into a memorandum of understanding with the Board for a secure exchange and utilisation of a person’s information.

The Board may use and utilise any information communicated to it by the National Database and Registration Authority and forward such information to an income tax authority having jurisdiction in relation to the subject matter regarding the information, who may utilise the information for the purposes of the Ordinance.

The National Database and Registration Authority may compute indicative income and tax liability of anyone mentioned under subsections (1) or (2) by use of artificial intelligence, mathematical or statistical modelling or any other modern device or calculation method.

The indicative income and tax liability computed by the National Database and Registration Authority under sub- section (4) shall be notified by the Board to the person in respect of whom such indicative income and tax liability has been determined, who shall have the option to pay the determined amount on such terms, conditions, instalments, discounts, reprieves pertaining to penalty and default surcharge, and time limits that may be prescribed by the Board.

In case the person against whom a liability has been determined under sub-section (4), does not pay such liability within the time prescribed under sub-section (5), the Board shall take action under the Ordinance, upon the basis of tax liability computed under sub-section (4).

If the person against whom the liability has been determined under sub-section (4) pays such liability in terms of sub-section (5), such payment shall be construed to be an amended assessment order under section 120 or sub-section (1) of section 122 or sub-section (4) of section 122, as the case may be.

Definition of the term ‘Distributor’

The term distributor has been defined to mean a person appointed by a manufacturer, importer, or any other person for a specified area to purchase goods from him for further supply.

Tax Invoice

The term tax invoice has been defined for income tax law purposes.

Audit Report

The concept of issue of ‘Audit Report’ by the taxation officer has been abolished.

This is the most regressive amendment made in the law. Issuing an audit report is an essential part of a self-assessment scheme.

Furnishing of Information

The provisions relating to furnishing of information by the tax department have been clarified. Under the new provisions notwithstanding anything contained in the Qanun-e-Shahadat, 1984 (P.O. No. 10 of 1984), the National Accountability Ordinance, 1999 (XVIII of 1999), the Federal Investigation Agency Act, 1974 (VIII or 1975) and the Right of Access to Information Act, 2017 (XXXIV of 2017), or any other law for the time being in force, no court or other authority shall, save as provided in the Ordinance, require any public servant to produce before it any return, accounts, or documents contained in, or forming a part of the records relating to any proceedings under the Ordinance, or declarations made under the Voluntary Declaration of Domestic Assets Act, 2018, the Foreign Assets (Declaration and Repatriation) Act, 2018 or the Assets Declaration Act, 2019 or any records of the Income Tax Department generally, or any part thereof, or to give evidence before it in respect thereof.

Advance Tax on sale or transfer of immovable property

Previously this tax was not collected if the property is held for more than four (4) years. Now this period has been extended to ten (10) years.

Collection of Tax

Collection of tax by educational institutions and purchase of property has been abolished.

Prize schemes to promote tax culture

Invoice by Integrated Enterprise

The Board may prescribe prize schemes to encourage the general public to make purchases, or avail services only from integrated enterprises issuing tax invoices. The Board may prescribe procedure for mystery shopping in respect of invoices issued by integrated enterprises randomly and in case of any discrepancy, all the relevant provisions of the Ordinance shall apply accordingly. In case of an integrated enterprise, no sale shall be made, or service shall be rendered, as the case may be, without generating fiscal invoices as prescribed.

Income from Behbood Certificate etc.

Income from Behbood Saving Certificates, or Pensioner Benefit Account and Shuhada Family Welfare Account has been subject to final tax at the rate of 10 % has been reduced to 5%.

Capital on disposal of immovable property.

The capital gain on sale of immovable property has been increased to 15% if sold within one year. This rate will become zero over the period of six years.

Withholding Tax on Acquisition of Property

Withholding tax on filers and non filers on acquisition of property has been increased to 2 and 5% respectively.

Rate of tax on offshore digital services

The rate of tax on offshore digital services has been increased from 5 to 10 %.

Rate of Tax on Export of Service

As against a general rate of 1% a special reduced rate of .25 % has been introduced for export of services representing computer software or IT services or IT enabled services registered with Pakistan Software Export Board.

Mutual Funds

For the purposes of determining the threshold of distribution by a mutual fund the amount of losses will also be deducted from income.

Special Technology Zones Authority

Profits and gains derived by –

(a) zone developer as defined in the Special Technology Zones Authority Act, 2021 (XVII of 2021) from development and operations of the zones for a period of ten years starting from the date of signing of the development agreement;

(b) zone Enterprises as defined in the Special Technology Zones Authority Act, 2021 (XVII of 2021)for a period of ten years from the date of issuance of licence by the Special Technology Zone Authority; and

(c) Special Technology Zones Authority established under the Special Technology Zones Authority Act, 2021 (XVII of 2021).

have been exempted from tax.

Profits from Electric Power Generation Project

The profit from electric power generation projects are exempt from tax for projects installed upto June 30, 2021. In order to remove the possible ambiguity, an explanation has been inserted that exemption under this clause shall continue to remain available to those persons to whom exemption under this clause was available on or before 30th day of June, 2021 before insertion of sixth (6) proviso inserted vide Finance Act 2021. Sixth proviso related to cases who have entered into agreement or to whom letter of intent has been issued. It has however been stated that even in those cases exemption shall be available for the life cycle of the project or 25 years from the date of commencement of commercial production, whichever is earlier.

Income from cinema

Any income derived by a person from cinema operations in a tehsil or town where there is no cinema, for five years from the commencement of cinema operations:

Tax rate on distributor, dealers wholesalers and retailers of fast moving goods

The rate of tax of .25% has also been made applicable for persons dealing in steel.

Tax on Person on Profit on Debt (Federal Government Securities) by persons other than insurance and banking company

A special rate of 15 % was introduced for such profit on debt. This special rate is proposed to be abolished.

Minimum Tax

Mobile phone manufacturers engaged in the local manufacturing of mobile phone devices shall not be subject to minimum tax on turnover.

Withholding Provisions for Certain Institutions

The provisions for deduction or collection of withholding tax shall not apply to the persons mentioned in Table 1 of clause (66) of Part I of the second schedule as recipients of payment: Provided that such persons shall continue to perform functions as withholding and collecting agent under the aforesaid provisions.”

Repeated Selection of Audit

Audit of a taxpayer shall not be made of a person whose income tax affairs have been audited in any of the preceding four tax years provided that the Commissioner may select a person under section 177 for audit with approval of the Board.

This is a very good provision however the discretionary power of the Board is also required to be regulated properly.

Active Taxpayers’ List

Tax required to be collected with respect to purchase of motor vehicle shall be increased by two hundred percent of the rate specified in First Schedule in case of persons not appearing in the active taxpayers’ list: Provided further that the tax required to be collected under section 236K shall be increased by two hundred and fifty percent of the rate specified in Division XVIII of Part IV of the First Schedule in case of persons not appearing in the active taxpayers.

Removal of Tax Amnesty Scheme

A tax amnesty scheme was introduced by way of Section 100F of the Ordinance. This scheme was applicable up to the tax return filed by December 31, 2021. This scheme has already expired. It is considered that beneficiaries of the scheme will continue to avail the concession despite the removal of section in the Ordinance.

CAPITAL VALUE TAX

A new capital value tax has been levied for the year 2022 on:

  1. Foreign assets held by resident individuals exceeding Rs. one hundred million (100,000,000) at the rate of 1%.

  2. Motor vehicles exceeding Rs five (5) million 2%

It is important to note whether or not the Federal Government is entitled to tax an asset under the Federal Legislative List. This effectively represents reintroduction of wealth tax in Pakistan. The validity of such charges is expected to be tested in the courts of law.

SALES TAX

The proposed budgetary measures pertaining to Sales Tax for FY 2022-23 are:

Relief Measures:

  1. The condition of CNIC/NTN in case of supply to unregistered person have been removed.

  2. Sales Tax exemption has been granted on import and supply of all types of seeds.

  3. Sales Tax on Tractor is withdrawn.

  4. Exemption has been granted on imports by UN diplomats/diplomatic missions and privileged persons.

  5. Import and supply of solar panels (PV module) has been exempted from sales tax.

  6. Goods imported by or donated to nonprofit charitable hospitals has been exempted. Furthermore, good supplied to charitable hospitals of fifty beds or more have also been exempted from sales tax.

  7. Temporary imports have been exempted from the levy of sales tax.

  8. Made up jewellery has been made chargeable to 3% fix tax on local supply and 4% fix tax on imports.

  9. Plant and machinery imported by power generation projects that entered into implementation agreement with GoP has been exempted from sales tax.

  10. Rs.90 per kg is reduce to Rs.60 per kg on potassium chlorate.

  11. Import by EPZ has been exempted from sales tax.

Revenue Measures:

  1. The scope of further tax has been enhanced to include non-active taxpayers as well.

  2. Regime of other then Tier-1 retailer has been streamlined.

  3. VAT has been imposed on compressor scrap, motor scrap and copper cutting scrap even when imported by manufactures.

Federal Excise

The proposed budgetary measures pertaining to Federal Excise Duty (FED) for FY 2022- 23 are:

Revenue Measures:

  1. Rate of FED is enhanced on locally manufactured cigarettes.

  2. Rate of FED is enhanced on club, business and first class travel by air is enhanced from Rs. 10,000 to Rs. 50,000.

  3. Rate of FED is enhanced on telecommunication services is enhanced from 16% to 19.5%.

Copyright Business Recorder, 2022