Tax experts describe tax relief as ‘too little, too late’

LAHORE: Tax experts have termed tax reliefs as “too little too late” because of stringent economic conditions and irrational revenue target.

Talking to the Business Recorder, Mustafa Ashraf, leading tax consultant, the federal budget has extended a meager relief to the salaries class, followed by a similar trend in the real estate sector. He pointed out that the low income groups in the society would have to pay through their nose as tax rate on bank deposits and stock market investments has been increased from 15 percent to 20 percent. This single step would make the life of low income groups miserable. According to him, the federal government has extended a meaningless relief to the salaried class above the limit of Rs 1.2 million per annum. Interestingly, he added, no relief has been doled out to those who pay a maximum tax of 35 percent against their salaries.

“Only those earning Rs 125,000 per month would get benefit out of the budget announcements, he lamented. Regarding 18 percent on solar panels, he said, the government had removed tax on the import of solar panels two years back. However, soon the public has diverted to solar energy, the government has withdrawn tax relief. It would extend the Return on Investment (ROI) from existing three years to six year, which means those going to get solar panels would have to face a burden.

When asked about the revenue target, he said, it is based on assumptions and once first quarter of the next fiscal would end, the government would have no option but to revise it downwards. Already, he said, the Federal Board of Revenue (FBR) has failed to achieve the current year revenue target despite a draconian law of speedy recovery soon after a verdict from the higher appellate forum without providing opportunity to tax payer of challenge it. Hussain Sherazi, another tax consultant, the kind of inflation being faced by a common man over the last three years would mitigate the tax relief against salaries. He said the present budget has been dictated by the IMF and nothing could be drawn out of it for general public.

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