The government has withdrawn the budget's fixed tax scheme for traders and hiked tax rates to collect an additional Rs 18 billion from t...
The government has withdrawn the budget's fixed tax scheme for traders and hiked tax rates to collect an additional Rs 18 billion from the tobacco sector before the International Monetary Fund approves a bailout package for Pakistan on August 29. Fund (IMF) conditions can be met.
According to a report by mak news-21, through the Tax Laws (Second Amendment) Ordinance 2022 issued yesterday, the government has also modified several revenue measures announced in the previous budget to facilitate various sectors and taxpayers and to comply with certain global conditions. have done.
In Budget 2022, the government had introduced a fixed tax scheme for retailers on commercial electricity connections (other than Tier-1) with the aim of collecting Rs 42 billion from these documentary measures, however the FBR has now on July 1 this year. The fixed tax scheme has been withdrawn from
The previous tax regime for retailers that was in place before the Finance Act 2022 has now been restored.
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The Ordinance empowers the Federal Government to make any future scheme and to determine the manner in which the rate or amount of tax and the levy of tax on commercial connections for retailers shall be implemented. Time will be determined.
Until the federal government announces the new scheme, the pre-Finance Act system will remain in force, with the ECC in its next meeting to collect Rs 27 billion from the retail sector as promised by the IMF. will approve a new scheme with new rates to collect tax from traders for
The government has raised the Federal Excise Duty (FED) on unmanufactured tobacco from Rs 10 to Rs 390 per kg to compensate traders for the loss of the scheme, which will hit poor tobacco farmers.
Besides, the government increased the federal excise duty on Tier-1 cigarettes from Rs.5,900 per thousand sticks to Rs.6,500 and on Tier-2 cigarettes from Rs.1,850 to Rs.2,500.
Also Read: Govt rejects reports of Rs 80 billion levy of taxes through mini budget
Through the Ordinance, the government took steps to alleviate the hardships of taxpayers and also introduced reforms to rationalize certain taxes and rates.
As per the ordinance, the rate of advance tax on passenger transport vehicles has been rationalized, the government has exempted the vehicles of foreign diplomats from capital value tax (CVT) for the transport of passengers and goods.
In the budget, the government introduced CVT for all motor vehicles above 1300 cc and electric vehicles of 50 kwh.
The government has restored from July 1 the earlier exemption on allowances and allowances paid by the government outside Pakistan for services provided to its citizens abroad, withdrawn under the Finance Act, 2022.
Read more: Relief given to salaried class ends, tax limit set back from Rs 12 lakh to Rs 6 lakh
At the same time, the government restored the exemption from July 1 on income received by the Kuwait Foreign Trading Contracting and Investment Company or the Kuwait Investment Authority.
The government also restored sales tax exemption on subsidies provided by the federal or provincial government on natural gas to consumers, including RLNG, under the Sales Tax Act, 1990.
The government also restored the sales tax exemption on local supply of single-cylinder agricultural diesel engines of 3 to 36 hp from July 1, an exemption withdrawn under the Finance Supplementary Act, 2022.
Pakistan has completed all the conditions and preconditions required by the IMF under the 7th and 8th review for the loan tranche of $1.18 billion and $4 billion from Qatar, Saudi Arabia and the United Arab Emirates. Additional dollar funding arrangements have been complied with.
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