06012016Wed
Last update: Wed, 01 Jun 2016 12am

Taxation: Pakistan

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The government would announce 17 percent sales tax on mineral water, a new Federal Excise Duty (FED) regime on cigarettes, Rs 1/kg FED on cement, 8 percent sales tax on sugar, 10 percent sales tax on poultry ingredients, enhanced sales tax on steel sector, new sales tax regime on marble industry (electricity consumption basis), 11.5 percent FED on beverages and 23 years exemption from sales tax and Federal Excise Duty to businesses for Gwadar Free Zone, 40 years sales tax/FED exemption on materials/equipment, ship bunker oils for ships in Gwadar Port and '' No Tax No Refund regime'' for textile, leather, surgical, carpets and sports sectors in budget (2016-17).
The Finance Bill 2016 would disallow input tax adjustment on sales tax paid against provincial services from 2016-17. Sources told Business Recorder here on Monday that FBR has proposed that provincial sales tax on services may be excluded from the definition of input tax. Therefore, taxpayers registered with FBR would not be able to reclaim input tax adjustment against the services received from their service providers operative within respective provincial sales tax authorities.
The strike of customs clearing agents for four consecutive days against the levy of 1% Infrastructure Development Cess (IDC) by Khyber Pakhtunkhwa government had paralysed customs clearance process at Peshawar Dry Port and the number of stuck-up containers loaded with imported goods climbed to 120.
In order to facilitate the collection of government duties/taxes, NIFT will provide special clearing facility on the advice of the State Bank of Pakistan on May 31, 2016 (Tuesday) at 3pm. The SBP has advised banks to keep their concerned branches open on May 31, 2016 (Tuesday) till such time that is necessary to facilitate special clearing for government transactions.
The government would announce withdrawal of 16 percent Federal Excise Duty (FED) on various services in budget (2016-17) including stock brokers, shipping agents, banking companies, stevedores, forex dealers, insurance companies, franchise services and other services where provincial sales tax is applicable.
Fulfilling a major budget demand of leading export sectors, the government has decided to apply sales tax at the rate of zero-percent on five export oriented sectors ie textile, leather, carpets, surgical and sports goods from 2016-17.
Federal Board of Revenue (FBR) has reportedly attached accounts of five power Distribution Companies (Discos) to achieve revenue targets agreed with the International Monetary Fund (IMF), well informed sources told Business Recorder.