15 percent flood surcharge to end on June 30

The 15 percent income tax flood surcharge would automatically stand abolished on June 30, 2011, unless extended through Finance bill 2011 for the next fiscal year (2011-12). Tax experts told Business Recorder here on Saturday that the 15 percent surcharge, imposed through the Income Tax (Amendment) Ordinance, 2011, would have no legal validity after June 30, 2011.
Any extension in the income tax surcharge would require extension through the Finance Bill 2011, if required. As soon as June 30, 2011 passes, the deduction of the surcharge would automatically be stopped by the tax authorities and the relevant column of the income tax return pertaining to collection of surcharge be abolished.
According to experts, income tax surcharge has proved to be the easiest way to collect revenue, without taking any enforcement or administrative measure during the last quarter of 2010-11. During period from March 15 to June 30, 2011, the FBR had projected to collect Rs 20 billion as income tax surcharge. If it is assumed that the surcharge has been extended for 2011-12, the rough estimate may show that the FBR can generate additional revenue of approximately Rs 80 billion during 2010-12.
However, if the government tries to extend the applicability of the surcharge it would be a clear violation of the commitment of the policy makers that the surcharge is applicable for the last quarter of 2010-11. It is worth mentioning that the FBR has said that imposition of 15 percent surcharge on the amount of payable income tax for the period March 15, 2011 to June 30, 2011 is applicable on all income taxpayers, whether individual, association of persons (AOPs), or companies.
The imposition of 15 percent surcharge on the amount of payable income tax for the period March 15, 2011 to June 30, 2011 is applicable on all income taxpayers whether individual, Association of Persons (AOPs), or Companies. It is an across-the-board surcharge, levied without exception or discrimination, on all categories of income taxpayers. As such, the promulgated law does not envisage any exemption or special treatment to any category of taxpayer, FBR added.
According to Income Tax (Amendment) Ordinance, 2011, Section "4A. Surcharge" of the Ordinance 2001 says, ":(1) Subject to this Ordinance, a surcharge shall be payable by every taxpayer at the rate of 15 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 since the promulgation of this ordinance, till June 30, 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.