THURSDAY JUNE 23: National Assembly rejects amendments proposed by opposition

ISLAMABAD: The National Assembly on Wednesday rejected two major amendments by opposition in Finance Bill 2011 in respect of enhancement in the rate of income tax on banking companies from 35 to 40 percent and raising the basic income tax exemption limit of salaried individuals from Rs 350,000 to Rs 500,000.
The opposition had proposed amendments to the Income Tax Ordinance 2001 to include a new clause in the respect of Division-II of the Ordinance. It said, 'provided that the rate imposed on the taxable income of banking company shall be 40 percent'. The amendment to enhance rate on banking companies was rejected by the house. Another amendment proposed by opposition was that the basic income tax exemption limit for salaried individuals be enhanced from Rs 350,000 to Rs 500,000. As per proposed table having eight slabs, where the taxable income does not exceed Rs 500,000, the rate of tax would be zero percent. The National Assembly rejected this proposal by the opposition.
In budget 2011-12, the government had announced that for the welfare of individuals with low income earnings, the basic exemption limit is proposed to be enhanced from Rs 300,000 to Rs 350,000. However, individual taxpayers whose normal income is between Rs 300,000 to Rs 350,000 shall be required to file return of income and statement, for the purposes of documentation. The government would suffer revenue loss of Rs 800 million in 2011-12 following increase the basic income tax exemption limit from Rs 300,000 to Rs 350,000.
The proposal of the opposition through amended Finance Bill (2011-2012) to slash sales tax rate from 16 percent to 10 percent was also dropped by the National Assembly. Other technical and legal amendments by opposition in Income Tax Ordinance 2001, Sales Tax Act and Customs Act were also rejected by the National Assembly.