ISLAMABAD: President Asif Ali Zardari on Tuesday promulgated three ordinances to impose 17 percent sales tax on fertilisers, agricultural tractors, pesticides, plants, machinery and equipment including its parts, a 15 percent income tax surcharge for Tax Year 2011 and raised special excise duty (SED) from 1 to 2.5 percent.
The government would generate an additional revenue of Rs 53 billion through these fresh taxation measures in the remaining period of the current fiscal year. Through notifications, the Federal Board of Revenue (FBR) has restricted the sales tax zero-rating facility of five export sectors - textile, leather, surgical, sports and carpets - to only registered manufacturers-cum-exporters or exporters for export purpose by amending SRO509(I)/2007. The domestic supplies of these five zero-rated sectors will now be liable to sales tax at the standard rate of 17 percent.
The FBR has rescinded SRO.564(I)/2006 whereby sales tax was charged on sugar at the rate of Rs 28.88 per kg. Now, the sales tax would be assessed on the actual market price of sugar. The rate of sales tax on sugar would remain unchanged at 8 percent. The assessable value of Rs 28.88 is creating a market distortion since ex-factory prices range between Rs 50 and Rs 60. The FBR has withdrawn sales tax zero-rating facility on plants, machinery and equipment by amending the SRO.549(I)/2008. The sales tax exemption has been withdrawn on fertilisers, pesticides and tractors. The FBR has also withdrawn sales tax exemption of input tax on agricultural tractors.
Official sources said that the FBR has rescinded various notifications to impose 17 percent sales tax on the said items. The Income Tax (Amendment) Ordinance, 2011 and Federal Excise (Amendment) Ordinance, 2011 have imposed a one-time 15 percent income tax surcharge and raise in the SED from one to 2.5 percent respectively for the remaining period of the current fiscal. The Sales Tax (Amendment) Ordinance, 2011 has been issued to impose 17 percent sales tax on agricultural tractors.
The government has taken a number of measures to reduce its expenditure. These include a ban on the purchase of durable goods till July 1, 2011. The government has also imposed a temporary ban on fresh hiring and recruitment. In addition, the government has totally banned capital expenditure and effected a 50 percent cut in travel and stationery budget. The cut in travel and stationery would help government save Rs 1 billion.
Following is the text of the Ordinances issued here on Tuesday: Sales Tax (Amendment) Ordinance, 2011: WHEREAS it is expedient further to amend the Sales Tax Act, 1990, for the purposes hereinafter appearing; AND WHEREAS the Senate and the National Assembly are not in session and the President is satisfied the circumstances exist which render it necessary to take immediate action:
NOW, THEREFORE, in exercise of the powers conferred by clause (1) of Article 89 of the Constitution of the Islamic Republic of Pakistan, the President is pleased to make and promulgate the following ordinance:- Short title and commencement:- This Ordinance may be called the Sales Tax (Amendment) Ordinance, 2011;
It shall come into force at once. Amendment in the Sixth Schedule, the Sales Tax Act, 1990: In the Sales Tax Act, 1990, in the Sixth Schedule in column 1, against Serial No 69, in column (2), for the words and comma "Tractors, bulldozers" the word "Bulldozers" shall be substituted.
Federal Excise (Amendment) Ordinance, 2011: WHEREAS it is expedient further to amend the Federal Excise Tax Act, 2005, for the purpose hereinafter appearing; AND WHEREAS the Senate and the National Assembly are not in session and the President is satisfied that circumstances exist which render it necessary to take immediate action;
NOW, THEREFORE, in exercise of the powers conferred by the clause (1) of Article 89 of the Constitution of the Islamic Republic of Pakistan, the President is pleased to make and promulgate the following Ordinance: Short title and commencement:- This Ordinance may be called the Federal Excise (Amendment) Ordinance, 2011;
It shall come into force at once. Amendment of section 3A, the Federal Excise Act, 2005: In the Federal Excise Act, 2005, in section 3A, in sub-section (1), for the word "one", the words "two and a half" shall be substituted. Income Tax (Amendment) Ordinance, 2011: WHEREAS it is expedient further to amend the Income Tax Act Ordinance, 2001, for the purposes hereinafter appearing;
AND WHEREAS the Senate and the National Assembly are not in session and the President is satisfied the circumstances exist which render it necessary to take immediate action;
NOW, THEREFORE, in exercise of the powers conferred by clause (1) of Article 89 of the Constitution of the Islamic Republic of Pakistan, the President is pleased to make and promulgate the following Ordinance:-
Short title and commencement:- This Ordinance may be called the Income Tax (Amendment) Ordinance, 2011;
It shall come into force at once. Amendment of section 2, Ordinance XLIX of 2001:- In the Income Tax Ordinance, 2001, after section 4, the following new section shall be inserted, namely:-
"4A. Surcharge:- (1) Subject to this Ordinance, a surcharge shall be payable by every taxpayer at the rate of fifteen percent of the income tax payable under this Ordinance including the tax payable under Part V of Chapter X or Chapter XII, as the case may be, for the period commencing from the promulgation of this ordinance, till the 30th June, 2011.
Surcharge shall be paid, collected, deducted and deposited at the same time and in the same manner as the tax is paid, collected, deducted and deposited under this ordinance including Chapter X or XII as the case may be. Provided that this surcharge shall not be payable for the tax year 2010 and prior tax years and shall be applicable, subject to the provisions of sub-section (1), for the tax year 2011 only".
Copyright Business Recorder, 2011
Comments
Comments are closed.